Agri-food Export Essentials

Speaker:

Collins Rex, Trade Specialist and Series Facilitator

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Collins Rex: Good afternoon, Everyone and welcome to the first Webinar in our series, Agri-food Export essentials and of course, the series is all about helping you to unlock your export success. And indeed, your export potential

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Collins Rex: the program is presented to you by agriculture victoria small-scale craft and pathways to export programs and they deliver a tailored Agri-food export essential series to support Victorian producers to build their capabilities, to export more products to more markets, more often it's a four-part series, and it focuses on the fundamentals to consider before starting your export journey, and they'll be introducing specific trade modules

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Collins Rex: to help you build your trade confidence.

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Collins Rex: Collins, Rex. I'm. Your presenter for the series, and indeed for today's session,

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Collins Rex: and I begin today by acknowledging the aboriginal owners of country throughout Victoria and their ongoing connection to this land.

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Collins Rex: For me. This is the land of the Burundi people of the coolant nation, and I pay my respect to elders, past, present, and emerging, and I extend that respect to all Aboriginal and Torres Strait Islanders, peoples who may be joining us today.

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Collins Rex: So let's have a look at today's session. We've got quite a lot of ground to cover today, but it's going to give you the basics that will set you up for the remainder of this Webinar series one.

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Collins Rex: So today we go to revisit the all important reasons for why you might want to go global. And then we're going to look at international business planning, including what your plan needs to cover, how you go about conducting a swot analysis, and we're going to move into market entry essentials after that, including selecting a market entry, requirements, market research and entry strategy.

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Collins Rex: And finally, today we're going to look at market entry barriers, and we'll be uh exploring the natural barriers and the artificial barriers, and then finally, also looking at tariffs and duties and non tariff barriers, and as always, of course, if you have any questions feel free to type those in the Q. And A. Box.

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Collins Rex: So first of all, why is it that you might want to consider going global. Well, going global has any number of advantages, including leading to increased sales, revenue and profit.

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Collins Rex: Now we all know that Australia is a relatively small market, and if you expand overseas, you increase your sales potential.

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Collins Rex: So if you are, for example, a small scale craft brewer, and you've produced some really great products. You're doing incredibly well in the Australian market, and you've pretty much saturated the Australian market. One

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Collins Rex: now is the time when you want to start looking at other avenues to export your product ways in which you can expand your production and increase your sales potential.

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Collins Rex: Going global also lowers your risk. Now, that might seem counter intuitive, because if you go into overseas markets, you have various vagaries that you need to comply with.

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Collins Rex: But of course, if you spread your risk, you also reduce your risk, and that is why your risk is lower. If you are active in more than one market, if you're only active in one or two markets. If you lose one or two of those markets, that's probably the end of your business

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Collins Rex: Going Global is also going to lead to more innovation, and the reason for that is that you have to stay ahead of the competition. If you are going to succeed internationally, and that means you'll be developing new products or services. You'll be finding new ways of processing, packaging, distributing, etc. And all of that ultimately makes your business smarter and and and better.

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Collins Rex: And if you do operate internationally, you're also going to be attracting better staff. Now we all know that at the moment the agri-food sector, along with a number of others is really struggling when it comes to attracting staff at all, and certainly attracting good staff. So if you start trading internationally, you give your staff more opportunities. You give them more opportunities to engage one hundred.

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Collins Rex: And of course you are going to grow, which also means there's a lot more job security.

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Collins Rex: But of course, going global, Isn't right for everybody. So before you make the decision to start trading internationally, you have to make the decision for you, and that means you need to decide is exporting right for you, for your business, for your brand and for your products and services, just because it's right for a competitor doesn't mean It's the right thing or the right time for you.

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You really do have to take into account the implications for you when it comes to going global.

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Collins Rex: So before you make that decision to go global, you need to understand that international trade is fundamentally different from trading. Locally. Yes, business is business, and of course all the same rules apply.

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Collins Rex: But there are nuances that come into play when you're trading internationally that are not in play trading locally, and when we look at market selection a little bit later on today, we're going to look at some of those nuances.

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Collins Rex: You also need to be aware of the pitfalls

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Collins Rex: and the ways in which you may not be able to sustain long-term growth. And Then of course, there's the all important risk management piece so much as trading globally low as your risk by spreading it. There are also any number of additional risk factors that you have to take into account, and you have to, along with expanding. You have to manage your domestic customer base.

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Collins Rex: You have to make very sure whatever you do internationally does not negatively impact your domestic business because you stand the risk, unfortunately, of losing both.

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Collins Rex: You also need to have a very clear vision of what it is you want to achieve. So why is it that you want to be exporting? Is it because you want to develop product lines? Is it because you've saturated the local market, and you have to move offshore if you're going to grow one,

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Collins Rex: is it because you really like the idea of going offshore? You need to understand why it is that you want to expand, and that will also help inform the decision of how you're going to do it,

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Collins Rex: and you need a plan. Your international business plan needs to be a supplement to your overall company business plan. Your international plan cannot function in isolation, and I cannot stress enough. That preparation is absolutely the key to it all.

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Collins Rex: So think about why it is that you're going global.

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Collins Rex: What is it you're trying to achieve?

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Collins Rex: Is going overseas going overseas, going to provide your business with economies of scale in production which will lead you to better utilize your resources and to lower your production costs. So

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Collins Rex: that example of our craft, Brewer,

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Collins Rex: You've reached Saturation Point in Australia,

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Collins Rex: but you're not able to produce quite enough to make it economically viable for you to expand. Maybe you need new production lines. The only way you can do that is by increasing your production. And that way you can actually start growing.

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Collins Rex: You also have to think about whether your product is ideally suited to a global market or not. Some products are born global, and they absolutely lend themselves to export.

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Collins Rex: We're very fortunate in Victoria in that we produce premium produce, and that produce is in high demand internationally. But of course you also have to think about what happens to your produce if you have a perishable product

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Collins Rex: when you are shipping it offshore? And is it indeed suited to doing that. So? Let's say. For example, you're a maker of ice cream.

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Collins Rex: Your ice cream might be very popular. They might be a huge demand for it in another country. Because, say, for example, a tourist came into Australia, tried your ice cream, loved it, looked for it at home.

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Collins Rex: It's not that easy to export ice cream. So how do you make that product suitable for an export market? Do you perhaps export not a frozen product, but a liquid product which is frozen on site in the other market one,

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Collins Rex: and of course you have to think about seasonal advantage again. We're in the southern hemisphere, which gives us a great advantage over the northern hemisphere produces, because we produce in there off season. If you have a seasonal advantage, that's definitely a reason to think about exporting

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Collins Rex: Now, once you've answered the questions and you're sure that going global is right for you and you ready to take that first step.

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Collins Rex: You need an international business plan. If you have a plan, you are far more likely to succeed than if you do not have one. And when we're talking about plan, we're talking about an actual written plan.

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Collins Rex: So why a written plan? Well, if you're going to look for finance, you need a written plan. You can't go to your bank manager and say, I've got this great idea, and it's all in my head, and i'll tell you about it. They are going to want to see a written plan with a number of specific pieces of information available.

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Collins Rex: Having a written plan also helps to crystallize your thoughts. Once you start putting pen to paper or typing as we tend to do today,

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Collins Rex: you will find that some things will become clearer, and also the gaps will present themselves, and you will understand what other work you need to do.

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Collins Rex: It's also going to help you identify risk, because again, until you've put it on paper, you may not consider all the various elements that are involved in going offshore,

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Collins Rex: and it is going to help you identify appropriate markets because you are going to have to answer some hard questions about the markets that you are thinking of entering.

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Collins Rex: So what does your business plan have to cover? Well, it needs a few basic areas that absolutely are crucial to the planned success, and one of those is a domestic business overview.

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Collins Rex: The other is a target market overview and then financial resources, the staff that you have available, the products of the services that you're selling the regulatory inquire requirements for the markets that you're looking at entering, and indeed, for exporting from Australia

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Collins Rex: your market positioning and your competitors, and we're going to look at each one of those in more detail

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Collins Rex: the keys to a successful international business plan

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Collins Rex: research research research research. You really do need to do your homework in order to get it right.

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Collins Rex: Also write your own plan. You can pay someone to do it for you, of course, but if you've written it yourself, you also have an intimate knowledge of it, and you will learn far more by writing your own plan than by just having somebody else drafted on your behalf.

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Collins Rex: Also make sure that once you've written that you get feedback on it and get feedback on it from your own team, but also from outside your organization, because other people will help you to identify those areas in which you might need to have some assistance, or where you might not have enough information, etc.

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Collins Rex: Also prepare an outline of all the key points before you start writing, and of course you have to put in your financial projections, but make sure that they are accurate and believable. There's no point in aiming for something which is impossible to achieve. And once you've got those projections in place, also test them

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Collins Rex: benchmark them. Make sure that what you are projecting is in fact achievable that it's accurate, and that it's true.

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Collins Rex: And every plan needs a decent executive summary. And this is really important, particularly if you're going to use your plan to try to find finance. Chances are executive summary which you're going to write last, but it's going to happen at the start of your plan is going to be listed at the start. One hundred.

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Collins Rex: That might be the only thing that someone like your bank manager reads, because if they don't like what they see there, or they don't understand what they see there. They might not delve any deeper.

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Collins Rex: So you will be getting a copy of the business plan. Template that you can complete at your leisure. And of course, as is always the case with any template, it's a guideline. It's something which you may need to change to suit your own business.

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Collins Rex: But these are the basic areas that you need to have in place. Of course, your contact information. If the plan is going to stand alone, and is going to be sent to anybody without you presenting it.

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Collins Rex: You need a basic history of your company. No need to go into too much detail here, but it does help to give an idea of who and what you are when you started, how you started, et cetera

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Collins Rex: all those bits that are relevant to your business.

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Collins Rex: You also need a summary of the products and all the services that you actually provide, and you need to include a section on your current sales and marketing strategy within Australia,

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Collins Rex: and then for each market that you're thinking of entering. You need to analyze that market. You need a market entry checklist for that market.

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Collins Rex: You need a sales and marketing strategy for each of those markets a risk management plan for each of those markets and an international growth projection. And this, of course, is where we get to those accurate projections.

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Collins Rex: So you're going to start by conducting a swot analysis. Swot analyses, of course, are not new. We all know them. We will use them, or we should do, anyway.

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Collins Rex: But the important thing when you're thinking of your swat is how a strength might be a weakness in a particular market, and vice versa. And, indeed, how something that is an opportunity could also be a threat.

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Collins Rex: And uh, what you see on your screen, there is just some of the areas that you might want to consider in your swat course. Your swat is going to be specific to you and your business, so you might not have all of these line items, or indeed, you might have different line items,

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Collins Rex: and once you got your business plan, you also need to consider market entry essentials, and there are some things that are absolutely crucial to success in your market,

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Collins Rex: because these are the ways in which you are going to make calculated strategic decisions when it comes to entry into a new market,

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Collins Rex: and yes, demographics are there, and they are a component, and they need to be considered. But there are lots of other things that come into play when you think about the right market for you, and it's not just about the number of people in that market.

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Collins Rex: So when you're selecting your market at the very least you need to consider. Is there an actual demand for your product or service? So not just a perceived one.

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Collins Rex: So let's say, for example, you are a maker of cheese, and you make really great cheese, and you have a little cafe attached to your cheese, making facility where people can come and sit down, maybe have a glass of one. Have a cheese platter, Try the cheese effectively before they choose to buy a more of it.

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Collins Rex: You have A tourist who comes in from China, sits down, has the glass of wine, has the piece of cheese, loves the cheese, and says, Oh, this cheese will sell so well in China

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Collins Rex: one that is a perceived demand for your product until you've actually tested the market. And you've ascertained just how many consumers they are of cheese in China one hundred and fifty.

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Collins Rex: How many consumers they are of the cheese that you produce in terms of variety, How many consumers they are that could afford the cheese that you sell, and whether you are indeed allowed to sell that same cheese in China. You don't know that there really is a demand.

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Collins Rex: You also need to ask yourself, Can you afford to sell it there? And how will you be paid? So that same piece of cheese they might be the demand for it. But you might find that your cheese is a premium product, one

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Collins Rex: which is priced out of the range of most of the consumers in China who would like to have it, and that means you cannot afford to sell it there and then. Of course, when we ask how you will be paid. We mean, what are the norms in a particular market?

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Collins Rex: Do customers in that market expect terms?

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Collins Rex: Credit, in other words, and you're not right in the position to offer credit, because you're just starting out, and you really need to be paid upfront, so understand that. And are you allowed to sell it there.

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Collins Rex: There is a quota in place, and that quota has been met. You won't, be allowed to sell your cheese in China

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Collins Rex: one, or, indeed, if there is not an import protocol in place for your cheese, and they might be a particular variety of cheese. So if yours is a raw cheese product, for example, a raw milk cheese product. You may not be allowed to sell it in a particular market one.

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Collins Rex: You also need to ask yourself the question,

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Collins Rex: Can you make it? Can you grow it in sufficient quantities and in the right timeframe?

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Collins Rex: Going back to our cheese example, you might produce a really small quantity of exceptional quality cheese. You get an order from that buyer in China, and that order might be in one order your annual production,

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Collins Rex: and they want it next month.

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Collins Rex: That, of course, means that it's going to be impossible for you to satisfy that demand,

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Collins Rex: and even assuming that you get everything else in place. You then have to ask yourself the question: Can you get it there? So can you actually transport that cheese and transport it in a way that it arrives in the right quality one

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Collins Rex: exactly what your customers expect. Condition has to be perfect when it gets there, and then you have to ask yourself, Can you support it there? And that means, how is your marketing going to be done in the case of that cheese product? Of course there's not after sales service that you have to consider here, but

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Collins Rex: your customer might need help, particularly if you're breaking a new market for the first time with a product that is not that known in that market.

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Collins Rex: Now some other market entry requirements that you have to take into account.

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Collins Rex: There could be entry quotas if a quota has been met, so only a certain amount of a certain good is allowed into that country within a certain time frame.

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Collins Rex: When that quota has been met. You will not be allowed to sell a product in that market again until that quota renews itself.

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Collins Rex: They could also be prohibitive. Entry costs on imported goods, and sometimes that's done to protect local production, or it's made to inhibit consumer consumption. So you will find that in certain markets they are additional taxes levied on alcohol,

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Collins Rex: so your spirits might be the best quality spirits available,

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Collins Rex: and you can sell them at a certain price point. But by the time you've added, in the additional costs for the excise that your customers have to pay, they might find your product too expensive in that market.

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Collins Rex: They can also be government controls on the import of certain products, so they might not allow certain products. In what are those key products? Is rice, for example, into China, which is also excluded even from our free trade agreement with China to protect local producers.

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Collins Rex: You might also find that there are severe restrictions on alcohol products in Muslim countries. Again, to protect consumers from excessive consumption.

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Collins Rex: They could also be requirements for you to set up in market, or to use specific channels to market, you might not necessarily want to enter into some sort of agreement with a local distributor. You might want to sell direct, and you might find that you're not allowed to in certain markets.

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Collins Rex: And there are other factors to consider, including how is your product going to be distributed in that market, particularly if it's a perishable product. And here you have to consider, not just the first mile,

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Collins Rex: but the last mile. How does it get into the hands of your end consumers. And then, of course, there are also issues like life cycle, shipment, approval, the need for quality certificates, standards, requirement, sanitary fighter, sanitary requirements, and the like.

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Collins Rex: So the key is market research. You need to do it. You need to do enough of it, and you need to do it comprehensively

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Collins Rex: ere

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Collins Rex: that might mean that. Well, if this customer like it, maybe others in that market will like it, too. So where would you like to do business? And Then you start doing the research starting with secondary market research. This is the desk research that you do on your potential market. And here, of course,

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Collins Rex: we're very fortunate today, and that we can do most of that research, using the Internet

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Collins Rex: do as much as you can online and then move into primary market research

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Collins Rex: and primary market research is where you have direct contact with experts, with potential customers or other sources of information physically in the country that you're thinking of going into two hundred and fifty,

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Collins Rex: and the easiest way or the usual way of doing this is through market visits.

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Collins Rex: You're going to get an aeroplane. You're going to go to Dubai, and you're going to figure out what people eat, how supermarkets are merchandised, et cetera.

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Collins Rex: Of course you could also use the services of a consultant in market

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Collins Rex: and in Victoria you might use the services of global Victoria, where there are experts in a number of key markets, and very often. There is also an agriculture victoria specialist in those markets who can assist you with specialist information.

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Collins Rex: You're going to be looking at the metrics of a market. Here we're looking at the size, the characteristics, the demographics

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Collins Rex: mit ctl.

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What is that market size? How many of them are there?

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Collins Rex: The current demand for products of your type. So how many people, for example, eat fresh fruit in this market? And then further down the stack? How many of those people are eating fresh strawberries, and how are they buying them?

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Collins Rex: Once you've assist the current demand. You then also need to assess the future demand. So the current demand might be relatively low, but if it is an increasing demand, the future demand might be exactly what you're looking for.

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Collins Rex: Of course, if the market is already saturated, and it's reached its growth. Potential chances are it's not going to keep growing into the future. So you might have missed the curve on that one,

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Collins Rex: and also think very realistically about your own company potential. So what are your internal capabilities? How many staff members do you have? Can those staff members cope with running the domestic business as well as the international one. And what are their strengths and their weaknesses? Two hundred and fifty?

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Collins Rex: Because if you don't have the right people in place. You might have to bring in people, or you might have to reconsider your overseas expansion.

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Collins Rex: Very importantly. You need to consider the competition. Who's already in that market? How much of the market share do they have? How difficult is it going to be to dislodge them, or to take them head on

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Collins Rex: the transportation to market. How are you going to get your goods there? Are you going to have to air fright it because it is perishable, and it is very sensitive, and it needs to get there. So if you're a fisher of lobsters, for example, one hundred and fifty,

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Collins Rex: If they are alive You're probably going to have to. If right them. You're not going to be able to put them on a ship and hope that they get there alive in six weeks or longer.

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Collins Rex: How suitable is your product? Not just for that market, but for the transportation method that you have to use. And Are there any import restrictions in place in that market?

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Collins Rex: Also think about product and supply chain security, Which, again, is very important when we're talking about food security. What are the legal requirements? So what do you legally have to do in that market, and also to get out of Australia?

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Collins Rex: Are there any barriers that Don't relate to duties. So how cumbersome is the customs process, for example, how strict are the quarantine rules, et cetera,

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Collins Rex: pricing very important.

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Collins Rex: You know what you need to charge for your product in order to make a profit. Can you sell it at that price in that market? Or do you have to consider selling at a lower price, but an increased volume.

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Collins Rex: How are you going to get paid in that market? What are the normal rules? In some markets everybody uses

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Collins Rex: prepayment in some markets. Everybody wants terms in some markets. People are quite happy to pay a deposit, and the rest on arrival in some markets they want to use letters of credit, et cetera. You need to understand how that affects your cash flow,

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Collins Rex: and then one of the business practices in that market. And how can you function within those rules? Are you comfortable functioning within those rules? One hundred and fifty?

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Collins Rex: And there are, unfortunately, still many markets in the world where things work on the basis of how much you are prepared to pay to smooth the path

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Collins Rex: it's against the law. It's particularly against Australian law, and it's immoral. If you have to function that way in a market, you might reconsider that market, and then one of the local support services, So

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Collins Rex: does the pathways to export team have assistance on the ground for you? There, Um. Does Austria help you in that market, for example?

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Collins Rex: And what is the language. And how do you work within the vagaries of the languages there? And here we're not just talking about English versus a foreign language. We're talking about the language of business in that market. And then, of course, there are all those social and cultural issues.

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Collins Rex: If you are a producer of pork products, they might be the best pork products in the world. But chances are you're going to struggle to sell them in Saudi Arabia. So think about the market. Think about the social and cultural issues and the fit for you and your products.

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Collins Rex: But there are lots of resources available online. As I mentioned. Uh, we're very fortunate we can access the Internet. What you see on your screen is a whole list of resources. And just to remind that that you will get copies of these slides made available to you. So you don't have to write all of this down, but feel free as well to take a screen. Grab if you want to, and some of the the resources that you see there. Uh, the Cia, and yes, it is the Central Intelligence Agency,

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Collins Rex: but the Cia's World fact book is

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Collins Rex: a wealth of information, and it's maintained on an almost daily basis. So it will give you lots and lots of really relevant information and very accurate information as well, and as you can see there, there's the World Bank Transparency, all the Wto. The Wco. Et cetera, and number of other organizations that will give you lots of access to reports, statistics, et cetera.

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Collins Rex: Now, the next thing that we need to think about when you are looking at exporting, and this is also part of your business Planning process

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Collins Rex: is how you are going to enter the market. So you've done all your market research. You then have to consider how you are entering the market, and you need to determine the strategy. And the first area is direct versus indirect market entry strategy.

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Collins Rex: So when it comes to direct exporting. We are talking about you selling from Australia into another market. Um! It is relatively time consuming. It needs lots of resources. You have to create an exporting infrastructure. You have to train employees, et cetera,

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Collins Rex: but on the positive side it also helps you to maximize your profits, because, Of course you're not paying any third parties because you control everything and you control it every step along the value chain.

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Collins Rex: Now, the most important part of exporting directly is marketing. And at the later session we're going to look in detail at marketing,

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Collins Rex: So we'll be concentrating on today is indirect, exporting. So indirect exporting involves you working with an intermediary.

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Collins Rex: And this pretty much low is your risk, because somebody else is going to take care of the exportation process. You can focus on the core business which is growing things, distilling things, brewing things, baking things, et cetera.

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Collins Rex: And you don't need quite so many resources. The profits are over all over because there is a middleman, and you do lose control over your sales at marketing overseas,

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Collins Rex: and the first of the indirect models is agent versus distributor,

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Collins Rex: and it's important to note that they not the same. They not interchangeable agents, are certain legal entities. Distributors are different entities, and they function on a different basis.

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Collins Rex: And the key point to note here is that an agent does not take ownership of the goods Agents don't buy anything from you. Agents just represent you in the market, and they generally take a commission on any sales that they generate.

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Collins Rex: You are still responsible for everything that is involved in producing the goods, generating the invoices, getting the payment, getting the goods to your customers, etc.

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Collins Rex: Distributors, on the other hand, do buy from you. They take ownership.

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Collins Rex: So distributors are effectively customers. They purchase goods from you, and then they on sell them, and they would add a margin over and above the price that they pay you.

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Collins Rex: There are any number of agreements that you can have in place, and very often distributors. Don't just have your goods in their stable, but others. And the important thing to note as well here is that they buy from you, and they sell.

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Collins Rex: The customers are theirs, not yours.

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Collins Rex: So just to recap. Agent doesn't take ownership of the goods, but it acts as a representative of you the supplier they usually based in the export market, and they usually represent several complementary product or service lines,

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Collins Rex: just because you have engaged the services of an agent does not mean you have sold anything in that market because agents do not buy any goods at all. You also need to be aware of the fact that in certain markets agents are considered employees, and if the agent isn't delivering, and you choose to terminate the arrangement, you might find that you're actually liable for any sort of costs that you would have incurred if they were a direct employee

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of severance, etc.

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Collins Rex: The distributor, to summarize buys the goods from you. They take title of the goods, and then they resell, and again they could carry other lines, some of them complimentary, some of them competing. So you need to bear that in mind as well. The distributor is also going to want a pretty healthy margin, because they do a lot more for your product

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Collins Rex: than an agent might do.

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Collins Rex: Now, whether it comes to agency or distribution. You need to determine whether you want an exclusive or a non exclusive arrangement. You do need a contract, and I cannot stress this enough. Have a contract with both your agent and your distributor,

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Collins Rex: and then consider a number of points, including exclusivity. Of course, if you give them exclusive rights, you could expect them to do a lot more. They'll ask for exclusive rights because they want to know that they've got a measure of security. But if you are going to make anybody your exclusive distributor or agent.

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Collins Rex: You need to make sure that you have a watertight agreement with proper kpis to be met. If they Don't meet them. You need to be able to put checks and balances in place to either terminate the agreement, or to have ways of recourse within that agreement,

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Collins Rex: any number of things that you need to take into account, and you can see them there. They the same sort of sensible business things that you would do if you're going in this into business with anybody. Um! And that includes how financially sound they are, how knowledgeable they are, what sort of sales infrastructure. They have, et cetera, et cetera, et cetera, and you can work through that list at your leisure. When you look at the slides,

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Collins Rex: the next model we're going to look at briefly, is licensees versus franchises. And this is not something that many of you will consider. So we don't have to go into this in a great deal of uh detail. Just bear in mind that licenses have the right to use your Ip for a specific time,

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Collins Rex: so you might decide that that ice cream that we talked about earlier today is something you really want to sell in market, but it's just too difficult, from a logistics perspective to get it there. So instead of making the ice cream here, or making the ice cream base here and exporting it one hundred and fifty,

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Collins Rex: you license that product to somebody in another market,

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Collins Rex: and the licensee gets the recipe. They get the method, the methodology, et cetera. So they make your ice cream, and they have the license to make it under your name. Exactly your methods, and sell it under that name.

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Collins Rex: They would have it for a certain period of time, you would review that agreement from time to time.

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Collins Rex: Franchisees have the right to market and distribute goods or services, and to use the business name for a fixed period of time.

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Collins Rex: Now, licensing is a great way to use in tangible property copyright trademarks, or indeed, things like recipes and methods, and they can reduce your risk in a new market, because it's a really good way to finance your overseas expansion.

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Collins Rex: But do understand that you might shut yourself out of that market going forward. If you don't have the proper contracts in place,

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Collins Rex: the franchising also low-cost low risk um it allows you to use cultural knowledge. Know how et cetera of local managers on the ground. But you have continued obligations to the franchisee one

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Collins Rex: you have to keep supporting them, even after the initial one-time transfer of property is complete,

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Collins Rex: and the final model or the final model versus model that we're going to look at is partnerships versus joint ventures. Partnerships are generally between two or more people. They can be personal names; they can be registered business names. One

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Collins Rex: something to take into account here is that partnerships can be easily dissolved, and you do need to have an agreement.

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Collins Rex: Joint Ventures, on the other hand, can be owned and run by just one person. They're independent legal entities, and they are separate from the members of the joint venture itself.

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Collins Rex: And that means that the personal assets of the members are also separate. So you are effectively corralled from the joint venture.

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Collins Rex: Partnerships have controlled management and responsibility shared within that organization.

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Collins Rex: The partnership is not a separate legal entity, so bear that in mind it's not a thing of its own. It's not a separate legal entity, and that's why you and your partners are jointly responsible for the organization any deaths that incurs, et cetera.

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Collins Rex: A joint venture is a strategic alliance, which is generally brought into being for a specific purpose, and then it's dissolved. It's a shared enterprise, but it is a separate legal entity, and it can be incorporated or unincorporated.

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Collins Rex: Um. You might adopt a unit trust structure for example.

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Collins Rex: Now, the reason joint ventures are important mechanisms when you are looking at market entry is that they are certain markets that require joint ventures for somebody to enter that market very in mind. We're talking about not selling directly we're talking about you having a presence in the market here, and that means you might have to legally have a joint venture that has a local partner.

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Collins Rex: And then the final method of entering the market is, in fact, setting up in the market setting up in an overseas market is complicated. Uh you've got, Amongst other things, the interplay of two tax systems.

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Collins Rex: There were regulatory requirements, legal requirements and lots and lots of risks. So, just as it was complicated when you set up your business for the first time in Australia, it's exponentially more complicated if you're going to do it in a market that you don't know. So if you are thinking of setting up an office, even if it's just a sales office in another market.

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Collins Rex: Get legal advice and do it before you've d the toe in the market before you've spent any money at all, because any money you spend on your lawyer will come back to you multi-fold if you run into problems on the other side of the world.

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Collins Rex: So when you are thinking about setting up in markets. Consider the legal entities available just because legal entities are available in Australia doesn't mean the same ones are available overseas and not to foreign owners. So what restrictions are there on foreign ownership and in the market sector in which you operate, you might find that you will not be able to make certain alcoholic products in most markets. One hundred

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Collins Rex: you will have to have special licenses, etc. For that

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Collins Rex: is your business going to need those permits in order to operate, and who should head up the office? Are you going to do it? Um, and give up your Australian life for a period of time? Or are you going to appoint somebody in market? And are you indeed allowed to employ staff as a foreigner?

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Collins Rex: Think of those professional services you need. If you uh need a professional services firm,

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Collins Rex: you might not be able to use your Australian accountant in that market, because it's not legal for them to operate there. You may not need to be able to use your own legal services, for example, because, again, it may not be allowed in that particular market.

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Collins Rex: And then where are you going to set up market uh office? Rather.

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Collins Rex: Every market is different, and every country has all sorts of issues within that country that will make it easy or difficult to set up there. So are you going to set up in a major city? Are you going to set up in the secondary city. Are you going to set up in a rural location? If you want to go and grow something, chances are you're not going to choose the major city, then to choose the regional location.

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Collins Rex: And then how are you going to cope with language and cultural differences in that market, and that includes employing staff dealing with employment regulations,

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Collins Rex: and of course, setting up in market comes with all sorts of barriers. So, too, does entering the market in any shape, size, or form,

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Collins Rex: mit ctl. And so what are market entry barriers? These are barriers to entry that are obstacles or hindrances that make it difficult for new companies to enter a market one hundred and fifty.

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Collins Rex: So here we could be looking at technology challenges, government regulations, and this includes the tariffs and duties that are imposed on imports, Payton startup costs, etc. Education, licensing requirements.

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Collins Rex: What certifications do you have in Australia that are not recognized in other markets, and you might have to go down the track of becoming recertified.

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Collins Rex: A primary barrier to enter into is the cost that makes an economic barrier to entry all on its own, and an ancillary barrier to entry refers to the cost that doesn't include a barrier by itself, but reinforces other barriers.

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Collins Rex: So these are not the direct costs, but they those in direct costs that might have knock on effects.

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Collins Rex: Two types of barriers to entry, natural and artificial, natural is generally structural and artificial, is generally strategic,

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Collins Rex: so natural barriers to entry, we talking about economies of scale. So if an incumbent in the market has already exploited the economies of scale, i. E. They own the market. It's going to be really difficult for you to enter that market

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Collins Rex: because you not going to find a gap, and anything you do is going to cost you substantially more money. The incumbent doesn't need to spend that money because they're already there, and they already have the market share.

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Collins Rex: The next issue is networking. So the network effect the stronger the network that exists in that market, the more difficult it is for new players to gain traction in that market.

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Collins Rex: So in this case we're looking at a network like the Internet, for example, the Internet, is a network of networks where people connect to each other.

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Collins Rex: That's in the ether. Physically, they could be similar networks in a market where there are so many strong connections that it's really hard for you to break any one of them. One,

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Collins Rex: The natural barriers to entry include high research and development costs in order for you to enter that market. You need to do research on how you have to change your product, adapt your product, et cetera, in that market one hundred and fifty.

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Collins Rex: So one of the things that you might think about, for example, is, if you are a producer of whiskey,

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Collins Rex: and your whiskey has a certain flavour profile that is perfect for Australian conditions. But now you want to break into Japan. We all know that Japan has a really well-known brand of whiskey called Santori Santori has a flavour profile that is perfectly suited to the Japanese palate.

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Collins Rex: In order for you to compete with Centauri, you are going to have to do extensive market research to understand that flavor profile, to understand that local pallet. And then you are going to have to invest in development to make sure that your whiskey for the Japanese market is adapted to that flavor. Profile meets the requirements of those consumers that's going to cost you money. They don't spend money on that

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Collins Rex: mit ctl, and they already have that market. And then, of course, they are set up costs, and very often these are things that you can't recoup by including them in your price, and that includes marketing and advertising. Fixed costs like rent, et cetera, one hundred and fifty,

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Collins Rex: and then the competitors might own all the raw material, all the key resources, and that makes it really hard for you to come in if you have to use local produce.

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Collins Rex: So if you're a maker of uh biscuits, for example, and instead of just selling them from Australia, you decide to enter that market and bake them there, and you export certain of the products from Australia and some of the stuff you have to get there. Maybe you decide to buy local vanilla,

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Collins Rex: but the vanilla is owned by everybody that's already in the market, very hard for you to break in there

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Collins Rex: and then. Of course, there's predatory pricing. So competitors very often to keep a new player out will lower their prices, they lower their prices, they increase their volumes, and that makes it really hard for somebody new to come in at a certain price point

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Collins Rex: advertising um Generally the incumbents Don't need to spend as much money on advertising as new players in the market do, and that is a sunk cost, which is one that you simply cannot recoup.

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Collins Rex: And then there's brand value, the incumbents unknown. They recognize they have brand value and brand customer loyalty. You, as a new player, may not have that, and you'll have to break in.

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Collins Rex: Now, of course, there are Australian brands that by virtue of being Australian, have great brand recognition everywhere in the world, but smaller brands generally have to work all that much harder.

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Collins Rex: And then there are things like contracts, patents, licenses, and the like, that you have to invest money into, and finally, not so much in the agri-food sector, but loyalty schemes, and switching costs.

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Collins Rex: Uh, if they are loyalty schemes in place for supermarkets, for example, to buy from certain suppliers they not likely to switch, and if they do, they might be slammed with switching costs which makes it more difficult for them to change providers.

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Collins Rex: That sort of focus for a moment on tariffs and duties. Now duties are indirect taxes that are imposed on the consumer by the government, whereas tariffs are direct taxes that are imposed by the government on goods that are imported from a different country,

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Collins Rex: very often use the two terms interchangeably, but they are subtly different

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Collins Rex: when duty we're talking about customs, duty, countervailing duty, and to dumping duty with tariffs are more likely things like at valorum tax and specific tariffs. Um. So tariffs we're talking about things like Gst, for example,

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Collins Rex: in order to determine what tariff and duty is ascribed to a particular product. A product needs to be classified,

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Collins Rex: and goods are classified according to a specific term, and a specific set of rules, and this is the harmonized system or Hs.

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Collins Rex: So if you already exported, you will have an Hs code. If you have never exported before. You've never needed one because you don't use them domestically, so you probably have to figure out what your Hs code is, and the Hs system is a multi purpose, international product. Nomenclature that was developed by the world. Customs organization comprises more than five thousand commodity groups. Each one is identified by a six digit code

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Collins Rex: mit ctl, and and these are arranged in a logical legal structure, and each one denotes specific rules that apply to that product over ninety-eight percent of all merchandise is classified in terms of the Hs code, one hundred and fifty.

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Collins Rex: Now, we are going to talk in more detail about Hs codes in the latest session, particularly when we start looking at transport and logistics. But if you want to know what your Hs code is, you can look it up, and you can see the address there. If you go to Abf Gov. Dot a you, and then just follow the links. You'll be able to find tariff schedules, and once you've denoted your Hs code, you will also know which rules apply to that product

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Collins Rex: according to that Hs code in every single market in the world.

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Collins Rex: Now, in Australia. In addition, we actually use the A hex system, which is that Hs code, with a couple of additional digits put on the front of it, and we use it to identify the goods being exported from Australia. So it's an additional set of numbers.

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Collins Rex: Your importing country and your importing customer will still look at the basic Hs code, and when it leaves Australia the customs officials look at the first two digits, so they keep a record for the Australian Bureau of Statistics.

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Collins Rex: Of course, one of the reasons why we concern ourselves with tariffs and duties is because those are applied to goods in a certain way. But if there are free trade agreements, chances are those tariffs and duties are reduced or even taken away completed. So if Ti is a treaties between two or more countries that are designed to reduce or eliminate barriers to trade and investment.

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Collins Rex: And Australia currently has fifteen ftas with twenty-six countries, and we're negotiating a whole bunch of other ones as we speak. If you want to know which ftas we have and how they work, you can go to defect Gov. Dot au, and just follow the links to trade agreements.

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Collins Rex: Now, the final thing we're going to concentrate on or look at today is non tariff barriers. So these are those things that make it difficult for you to import, or indeed export, and they've got nothing to do with the tariffs or the duties applied to goods.

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Collins Rex: So the World trade organization identifies the non-tariff barriers as being import licensing pre-shipment inspections, rules of origins and unnecessary or extraordinary custom delays.

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Collins Rex: So it can be any kind of red type or any kind of trade rule that unjustifiably restricts the flow of goods and services into a specific country,

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Collins Rex: so some of those licenses you might need a specific license to export to a market, and your importer on that side will need a license to import. There are quotas, and we've talked about these already. There are embargoes, import deposits, and the like.

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Collins Rex: But if you've tried to export into a certain market. You've encountered something that you consider to be unreasonable. You can report it to the Australian Government, and they will act on that. So the Department of foreign affairs, and trade is coordinating a whole of government action plan one hundred and fifty,

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Collins Rex: and this will make it easier for you to report these non tariff barriers or in Tvs. And if you go to trade barriers you can have a look at how that works, and you can actually lodge the in Tvs that you've encountered in that particular area

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Collins Rex: that brings us to the end of today's session. Um, we haven't had any questions typed in the Q. A. Box. But if you do think of any questions after the fact, please reach out to me. Um! I'd be more than happy to take any of your questions offline, and you'll get my address when you get the follow up of today's session.

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Collins Rex: So all that remains is to point you in the direction of the website, where you can go to get further information, and also where you can register for the other webinars in the series. So, as I mentioned today, was Webinar number one. There are three more to come after today. They run at the same time, and they run two weeks apart. The next one is two weeks from today, and you can go to agriculture dot v dot au! And again, just follow the links

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Collins Rex: to the pathways, to export events, and you can register for all the upcoming Webinars.

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Collins Rex: Thanks everyone for your attention. Um! It's been really great having you with me today, and I look forward to the pleasure of your company at future sessions. Have a great afternoon, and go and do some good business. Goodbye,

Speakers:

Will Dalton, Manager – Pathways to Export

Collins Rex, Trade Specialist and Series Facilitator

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Will Dalton: Hello, everybody, and welcome. My name is Will Dalton. Uh, I manage the pathways to export program that sits within agriculture, Victoria.

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Will Dalton: Today I am coming to you from or injury country, and I would like to acknowledge the traditional custodians and pay my respect to their elders, past, present, and emerging.

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Will Dalton: I would also like to pay my respect to the continuation of the cultural practices and connection to the living environment of aboriginal and Torres Strait Islander peoples.

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Will Dalton: It is fantastic to welcome you all to this second Webinar on Agri-food export essentials

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Will Dalton: before I hand over to columns. I would like to mention the support provided through both the small scale and craft and pathways to export programs within agriculture. Victoria

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Will Dalton: Um. These programs are designed to support businesses, not only expand or diversify domestically,

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Will Dalton: but also on on their pathway to export. If if that is the right strategy for you. Um!

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Will Dalton: So I encourage you to reach out to us at any point following the workshop,

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Will Dalton: feel free to send an email to pathways to export at agriculture dot v dot au, and we can assist with your query from there,

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Will Dalton: but without further ado

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Will Dalton: I would now like to hand over to Collins to take you through the Webinar.

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Collins Rex: Thanks very much, Will, and just reiterating as well. But we'll said, You will also get copies of today's slide, deck, and contact details, and so forth, will also be in the deck, so as well mentioned. I'm Collins, Rex, and I'll be your presenter for today's session,

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Collins Rex: and I begin today by acknowledging the aboriginal owners of country throughout Victoria and their ongoing connection to this land and for me this is the land of the warundry people of the coolant nation, and I pay my respect to elders, past, present, and future; and I also extend that respect to any aboriginal and Torres Strait Islanders, people who may be joining us in today's workshop.

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Collins Rex: So Let's have a look at what we're going to be covering today. We've got quite a lot of ground to cover, so we certainly are going to hit that ground running. And uh starting off today with international marketing basics. We're going to be covering all for marketing objectives, marketing strategy. I'm going to give you a bit of a terminology, cheat sheet, and then now we're going to concentrate on the marketing mix

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Collins Rex: and we're also going to cover off some digital marketing basics today, because, of course, impossible to talk marketing these days without also talking about digital marketing.

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Collins Rex: After today's marketing session. We're going to look at the basics of freight and logistics touching on the key modes of transport and the key players in the industry.

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Collins Rex: Also inco terms two thousand and twenty. And we're going to end today with a look at the current state of freight.

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Collins Rex: Now, as always, you are more than welcome to type any questions in the Q. And a box that you see on your screen, and i'll keep half an eye on that and take those as we move through today's presentation,

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Collins Rex: and we're also delighted today to be joined by a number of members of the pathway to export teams. So you've already met, will, and also online, ready to take your questions. At the end of today's session We have Joe Jackson, and we have Shank Summers, so please feel free as well. If you have any questions for the team to pose those as we move through.

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Collins Rex: So without further ado, let's get straight onto it, shall we? And let's start off by talking, marketing, marketing a subject which is very close to my heart, and the process of planning and executing the conception, pricing promotion, and distribution of your products or services. And indeed, even your ideas to satisfy the needs of your customers. And of course you're going to be marketing what it is that you're selling,

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Collins Rex: whether you're selling B two B. And entering global supply and value chains, or whether you're going to be selling directly to end Customers B to C

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Collins Rex: marketing. Certainly shouldn't be an afterthought. When it comes to the way in which you plan your international expansion, it needs to be top of mind, and that means you need to devote the necessary time research, planning, and budget to it.

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Collins Rex: Once you get your marketing strategy, of course you've also got the way to inform your sales, techniques, your product and service range, your pricing strategy, your market entry, strategy, and a whole host of other things.

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Collins Rex: International marketing well comes as no surprise that it's all the above, but done in multiple countries very often at the same time.

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Collins Rex: So before you can even start thinking about marketing and what it is, you're actually going to be doing as part of your marketing drive. You do need to set some objectives,

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Collins Rex: and it really is important that you do this, because unless you've set these objectives, there's no way in which you can actually hold yourself accountable, and know whether any of those marketing strategies are actually achieving what they set out to do one hundred and fifty.

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Collins Rex: Now, again, when it comes to objectives best to be specific, and one of the most effective ways to actually determine those objectives is to follow the smart method,

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Collins Rex: and that means the objectives that you have should be specific. They should be measurable. They should be achievable, they should be very importantly realistic, and they also need to be time specific.

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Collins Rex: So if we look at an example of what that is, let's say, for example, one of your objectives is to achieve a twenty percent return on capital employed by March. The two thousand and twenty-three That would be a profitability objective, one

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Collins Rex: another one looking at a market share objective could be, for example, to gain fifteen percent of the market for boutique in in Peru by July, two thousand and twenty-four, and you can see there that that one is particularly specific. You've decided what percentage of the market share you want, what percentage of the sector that you want, i. E boutique,

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Collins Rex: and you've obviously specified the country, and you've put a very specific target date on this, and if you're looking at that sort of objective, having a target date that seems to be relatively further in the future. Um than the earlier one we talked about is quite realistic as well,

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Collins Rex: and then another one. You might decide that what you want to be is the preferred brand of handcraft to chocolate in Toronto by April, two thousand and twenty-four, and here the objective is very clearly a branding one. But again, with some of those other specifics brought into play as well one.

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Collins Rex: Now, once you've got your objective, of course it's really important that you put in place a marketing strategy.

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Collins Rex: And when we're talking strategy, we are talking about the why, underpinning everything that you will be doing in terms of activities around your marketing strategy.

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Collins Rex: So this is the overall strategy that you're going to use to position yourself within your chosen market to meet your customers need.

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Collins Rex: Your goal is to differentiate yourself from your competitors, because ultimately, of course, you want them to choose you over the competition

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Collins Rex: and the specific elements that you're going to use to make up your marketing strategy are typically referred to as the marketing mix also known as the four peas, and each of these elements you will adapt and broaden,

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Collins Rex: depending on the various markets into which you are finding yourself expanding

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Collins Rex: before we turn ourselves into that uh marketing mixed piece.

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Collins Rex: Let's look at some of the key terminology that you really do need to be across when you are thinking of any sort of marketing strategy,

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Collins Rex: and the first there is inbound marketing. So these are activities that draw visitors into you rather than pushing yourself out into the market,

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Collins Rex: outbound marketing. It then stands to reason is exactly the opposite and outbound. We're talking about advertising, cold, calling, direct mail, and also things like visiting trade shows in the market.

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Collins Rex: Closed-loop marketing enables you to execute, to track and to show how effective your marketing efforts have been, and how they have impacted your bottom line business growth.

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Collins Rex: A marketing campaign is an organized and a structured effort which helps you to achieve a specific marketing goal or objective.

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Collins Rex: A lead is somebody that's shown interest in your products or services, but they haven't gone any way down the track to becoming a customer.

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Collins Rex: The lead capture is a way for you to attract leads and to keep a record of them, so that you can then start further down the track to build a relationship, and that is exactly what lead nurturing is all about one hundred and fifty.

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Collins Rex: Now, assuming that your marketing is successful, those leads are then converted, and those leads eventually will become customers.

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Collins Rex: Content Is anything that a profess at prospective customer reads or views, in fact, anything that they interact with. And these days we tend to think of things that people interact with online. But of course it can also be written media. It can be newspapers, trade, press, etc.

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Collins Rex: Question that's just arisen from Lee. Lee asks in your experience. Has any market have been held to bottom line? Kpis.

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Collins Rex: Yes, indeed, if they are a marketer with their salt. They are absolutely held to bottom line, Kpis, and we will be looking at measuring success as well as we go through Lee

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Collins Rex: um content marketing. Of course, the practice of then using the content that you use specifically to attract customers to your website to get them to interact with you in some way. So it's not just passive. This is content which is used for a specific purpose, and that is to actually connect people to your business

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Collins Rex: analytics all about the discovery and communication of meaningful patterns in the data. So it's not just about how many people visited your website. It's what they did when they were there,

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Collins Rex: how they interacted with individual pages. If somebody has come to see you at a trade show, it's keeping track of who came, how they came what questions they asked when they would be, and any follow up that came from that.

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Collins Rex: Our I is an acronym for return on investment, and it's very important that you understand what you've spent on any of your marketing activities, and what the direct bottom line impact of that spend was so, for every one of the leads that you've generated. For example, from that campaign you need to see how much each one of those leads cost you.

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Collins Rex: Kpi, is a key performance Indicator. And this is a type of performance measure that's used to measure your company's success.

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Collins Rex: Now there is, of course, also the marketing funnel, where, at the top of the funnel you start with a whole large heap of people, and eventually, once you guys marketed to them. You've also included your sales team. That funnel gets smaller and smaller as it moves to the bottom, and fewer and fewer people make their way through until eventually, at the end of that funnel at the bottom of the funnel you've gone from leads to customers.

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Collins Rex: So the top of the funnel is the very stage of the buying process. This is where leads have identified a problem that they have, and they're looking for more information on how to solve that the middle of the funnel is where the problem has been identified, and they actually start doing the research to find a real solution. So if we look at the middle of the funnel by the time we get there, let's say, for example, you might have a customer or potential customer in a new market like the United States, one hundred and fifty,

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Collins Rex: and that customer could be a retailer like Walmart, and they've identified that they have a particular gap in their spirit market, and they looking for something quite unique to fill that gap, and they started actively researching the market to see what it is they can find

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Collins Rex: mit Ctl. And at that point you want to be positioned so that they can easily find content from your business. If you're in the spirits market, and they will then approach you to say we have this. Need we see what you do? We think that maybe your product could help us fill that gap two hundred and fifty,

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Collins Rex: and provided that the interaction is a satisfactory one. That's when those customers at Walmart become customers and they reach the bottom of the funnel they've shopped around. They found the solutions, and they are very close to buying, and it is your product that they have determined will be the best one one one,

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Collins Rex: and that takes us to the marketing mix. Now it is very important that you understand the concepts around the marketing mix, but also understand that you have to revisit this marketing mix for every one of the new markets that you are thinking of entering, because every market is unique, as we've already discussed in previous sessions, and Every market has its own vagaries, its own needs, its own wants, and customers in each market

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Collins Rex: will have specific requirements that could very substantially market to market.

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Collins Rex: So when we're talking about the full piece,

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Collins Rex: we used to talk about four of them. They were the traditional for peas, being product, price, place, and promotion.

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Collins Rex: But we now recognize that the full peas have to extend, and we've added

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Collins Rex: three commonly acknowledged other peas, those peas being people, process the physical environment.

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Collins Rex: And we do live in a digital world, and that digital world has actually added a handful of new peas. So we get to touch today on three more, that being permission, personality, and personalization.

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Collins Rex: So let's start off with the traditional peas the ones that we all most commonly associate with the marketing mix. And the first of these is the product now product here interchangeable with service one.

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Collins Rex: So here we need to find out what it is that the market means, and what it is that the market wants. Now there is a very specific difference between needs and wants. For example, we all need to eat,

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Collins Rex: but we all want to eat chocolate, and that really is what your customers are going to be looking for as well. They're going to be those product lines, those things that they absolutely have to have in the needs, and then they will be those that they want. So they might need, for example, a specific food product, because there is a shortage in a market,

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Collins Rex: but they want a premium product to fulfill that need.

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Collins Rex: So here you're also starting to think around your unique selling or value proposition, and your selling proposition is always secondary to the value proposition.

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Collins Rex: Ultimately it's all about what you can provide by way of benefit to your potential customer, and that is why they will ultimately buy from you.

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Collins Rex: And you also need to consider that your product is not just the actual thing. It is everything that goes around it. So let's say, for example, that you are a grower of apples, and those apples might be really beautiful. Premium apples, one hundred and fifty.

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Collins Rex: But of course the apples themselves are not going to end up just like that in the hands of your customers. You're going to have to consider how you package those apples, and depending on how far those apples are going to be traveling, whether you're going to see for them, or if right them you have to consider the robustness of the packaging.

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Collins Rex: Ultimately You're also going to have to consider that these apples are going to be somewhere in on a shelf in a supermarket, for example, and they have to be attractive over and above some of the others that might be next to them. So how are you going to make that happen? And then, of course, when we talking about labeling, we're not just talking about the things that we want to add on to the outside of our products those things that denote our brands, but also the things that by law in every specific market

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Collins Rex: we have to have on our labels, and here we've got contents. We've got food content and breakdown. For example, we've got uh things like dietary issues that might have to be incorporated on the label.

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Collins Rex: Some markets. You also have to have a complete recipe of any processed food. Item

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Collins Rex: mit ctl. And your label is also going to include things like best before dates, et cetera. So labeling vitally important and potentially also a really large cost item for you. If you have to translate labels from English into other languages. One,

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Collins Rex: you also need to think when you start looking at the way in which your product will be perceived in a new market what your brand reputation already is in that market. So if you're a wine producer and your wine is known in the international markets, then Obviously your brand reputation is already established, and it's easier for you to enter new markets and to leverage those

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Collins Rex: and here if we look at a very well-known Australian wine brand like Penfolds. They don't have to prove themselves, anyway. Everyone already knows who and what they are as a small boutique winery. You probably have to work a little bit harder. One hundred.

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Collins Rex: What also can work in your favor is the reputation of a state like Victoria, which is known to have really great value, agricultural products, processed foods, and the like, and also very well regarded wines, spirits, et cetera. And similarly so does Australia.

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Collins Rex: If we were in a different part of the world. That might be a different kettle of fish entirely, and we might have to work a lot harder to overcome negative effects of where we come from,

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Collins Rex: and when you're thinking about your product hand in hand, you're also thinking about the competition.

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Collins Rex: So what is the competition? Who is the competition? What do they do? How do they merchandise? How do they sell? How do they market? And are you going to take them head on and do what they do? Or are you going to do something completely different, and come at the market from a different direction?

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Collins Rex: And that, of course, also brings us to price. Now, when it comes to pricing yourself in a market, you have to consider, not just what the market will pay, but also what you can afford to charge one hundred and fifty

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Collins Rex: mit ctl, and and sometimes there is a disconnect between those two things. The market might only be able to afford a standard product, whereas you have to charge a P. Premium price in order to make the profit margin that you need to sustain your business. One hundred and fifty.

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Collins Rex: The reality is, there's probably a mid ground between those two extremes, but it is nevertheless very important to understand that if you are selling at a loss in a market.

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Collins Rex: You do not have a sustainable business, and you will not be a business for very long, so you have to make a profit. But you have to be realistic around what that profit can be.

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Collins Rex: Now there are any number of pricing models. They are literally a dozens that could work for any number of different businesses, but the main ones cost plus pricing, which

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Collins Rex: is everything it costs you to produce a product or a service plus a margin on top of that in cost, plus, of course, it is important to understand every single cost. Item that goes into your pricing, and for export pricing. There are any number of additional layers that you have to take into account one hundred

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Collins Rex: now, rather than go through this line by line, because it does get very complicated. Um, I will make available to you a cost breakdown and a formula of all the things that you need to look at when it comes to export pricing,

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Collins Rex: so Demand-based pricing is literally what the market will pay, and this is dependent on supply versus demand. The higher the supply and the lower the demand, the lower the price that you can ask for, and vice versa. Of course, when it comes to demand, raised pricing, it's also one hundred

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Collins Rex: mit ctl and key to Uh. I understand that they might be a really high demand and a low supply, which means you can achieve a really good price, one hundred and fifty,

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Collins Rex: but as other players into the market to help satisfy that demand, the supply will grow and the demand will probably tail off, so the price that you were able to achieve in a really high sort of market. With this the demand was really high, could come down over time,

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Collins Rex: and then marginal, costing the third of the main costing models. And this is where you take into account all your variable costs, but you effectively ignore the fixed and the overhead costs, and then also put a margin on those variable costs

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Collins Rex: You also need to take into account when you're determining your price in any market seasonal pricing.

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Collins Rex: So if you are selling in the northern hemisphere, you can probably command a relatively high price for fresh produce, because it will be unseasonal in that market at that time. That will be in mid winter. So if you've got those beautiful Australian strawberries, those that you grow just up the road in Victoria. Then you can command a much higher price in the northern winter than you would be able to in the southern summer.

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Collins Rex: The third P is place, and here we are talking about. Where will your products be seen? How are you going to make them? And where where are you going to sell them? Where and how are you going to distribute them?

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Collins Rex: You need to think about specific location. So if you're looking at a new market. Of course a new market is not one place. It's many places all wrapped into one, and you have to determine which of those places is best for you and your products, so you might determine that one of the major cities in the United States is the perfect outlet for your home baked biscuits uh all cookies as they would be referring to them there. But you're not going to try to take on the

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Collins Rex: E to the west of the United States because their people are far more likely to be baking their own goods. So think about where is the best opportunity for you and everything that goes with that place, including logistics, one hundred and fifty

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Collins Rex: freight, as we're going to be talking about in a little while from now, and also things like taxes, etc.

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Collins Rex: Mit ctl. And distribution problems that may occur, and indeed, how much competition there is. So your place is not just a specific place on a supermarket shelf, but it is the entire market that wraps around that specific place. Two

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Collins Rex: also think about regulations that could stop you exporting to a particular market. If there is no protocol for you to export your specific fresh product into that market, you will not be able to export it There also. Think about import restrictions. Um! Perhaps you've had an inquiry from somebody who's really keen to buy your particular product, but they don't have the necessary import licensing that they might need in some markets,

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Collins Rex: therefore they will not be allowed to purchase from you from another country.

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Collins Rex: Here you also need to start thinking about standards and certifications that you might need in certain markets, and also those all important quotas. And how do those affect, whether you are able to sell into a particular market or not

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Collins Rex: also think about barriers to entry that may have nothing to do with tariffs or duties. Those behind the border barriers. The fact that just the cost of market entry could be too high, that the competition is too stiff, et cetera. And then, very importantly, to consider logistics. How are you going to get your product, particularly if it is a perishable product, and it's a fragile product. How are you going to get it into the hands of your end? Customer in such a way

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Collins Rex: that it leaves your premises in a premium condition, and arrives on the other side in a premium condition as well. And what do you have to do by law to ensure that the cold chain is maintained, et cetera,

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Collins Rex: and the final of the traditional four piece is promotional. So These are all the activities that you undertake to make your customers aware of your products, and that includes advertising promotion, direct marketing, social media, et cetera, One hundred and fifty.

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Collins Rex: You have to think about what it is that you're good at. If you're really good at promoting yourself through social media, then that's probably what you want to stick to in your new market,

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Collins Rex: but also consider that the new market may not use the same social media channels that are available to you in Australia, and you will have to think about how you're then going to adapt what you do.

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Collins Rex: Also think about what you're allowed to do. So what may you advertise in a particular market? And what are the ways in which you may advertise it? There are many things that you might want to say, but that you are not allowed to say in a particular market, and of course that is particularly marked when it comes to making health planes around products

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Collins Rex: mit ctl and a life, or you cannot claim that it might be uh building immunity against Covid, for example, So do understand what you are allowed to do by way of promotion, and advertising one hundred and fifty One

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Collins Rex: also understand what it's going to cost you, because some markets are prohibitively expensive to advertise in and to run promotion

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Collins Rex: mit ctl. And so what is it going to cost to make sure you factor that into your cost of entering that market. And then, finally, what is the competition doing? If the competition is very active on social media, perhaps you make a decision not to go the social media route. Maybe you decide to go the more traditional advertising route one hundred and fifty

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Collins Rex: Um, If the competition is doing something in a particular way, and they seem to have captured a market. You probably don't want to do exactly the same thing. You want to come up with a new novel way of promoting what you do.

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Collins Rex: And now we come to those additional peas, the ones that in the past we didn't really take that much cognizance of, but which we now know are absolutely intrinsic to the way in which we market our services and our products. And the first of those is people one hundred and fifty

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Collins Rex: mit ctl. And here we're talking about your staff and your customers. So your staff. These are the people that will be driving your marketing, but also your customer service, and you have to have the right people with the right skill sets, and experience one hundred and fifty

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Collins Rex: mit ctl. And for your chosen market, of course, and things like having cultural sensitivity that's coming from the market that you're approaching and knowing firsthand what it is that people like in that market, language, ability, et cetera. One hundred and fifty

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Collins Rex: Also know where your customers are getting their buying information

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Collins Rex: erez agmoni. There's no point in advertising in a trade publication that nobody reads. It might be better for you, instead of being in the Farmers Weekly in South Africa, for example, to be advertising online into one of the major supermarket chains and taking space with them to do that, one hundred and fifty

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Collins Rex: understand where your customers are making their buying decisions,

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Collins Rex: so they get their information from certain sources, but they make the final decisions on buying in different areas, and many customers now are making those final buying decisions, even when they buying B to be, they making those decisions online. So you need to take cognizance of that.

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Collins Rex: The next P. Is process. And here we're talking about everything that is involved in getting your goods into the hands of your customers, and it is vitally important that customer service trumps everything one.

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Collins Rex: You need to understand everything that goes into fulfilling an order from the very beginning to getting that good into the hands of your customers one.

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Collins Rex: So if yours is premium carrots, We're talking about everything from the blend that you start with, to plant your seed in right the way through to harvesting a carrot that is the right size, the right shape, the right straightness, for example, the right width for certain markets in Japan. They're not just going to put something on a shelf. It has to be a very specific dimension before it's going to get shelf space

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Collins Rex: mit ctl. And so what happens to get you to that point, and then from that point into the hands of your customers. So everything, from understanding what the customer wants to, how the customer wants it packaged to packaging, to packing it, to flying it, or to putting it on a ship, and then eventually getting it into the hands of your customers, one

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Collins Rex: mit ctl and streamline all the processes as much as possible, because the simpler you keep it the less problems. They will be along the entire chain, and where possible, automate the processes. And here we're not just talking about production processes. We're talking about the processes of dealing with your customers. Have your ordering automated. Have your invoicing automated. One hundred and fifty.

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Collins Rex: Have somebody on your website, twenty, four, seven to answer queries in the form of a chat bot, for example, So automate where you can and where you cannot make sure that you have people who actually understand what you're doing

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Collins Rex: mit ctl. And the physical environment is the next of the additional peas, and this is everything that your customer sees when interacting with your business. So this includes the physical environment where you produce your product to your service one hundred and fifty,

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Collins Rex: and if you are a gym distiller, this is your distillery, and your customers want to see the distillery. They want to see the products. They want to see the gleaming copper, because it makes them feel that this is a product that has a certain weight and a certain quality one.

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Collins Rex: It's also the interior or the layout of any retail premises that you might have

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Collins Rex: as an offset. So even if you're not selling to the end customer in those premises. Those in customers will probably visit your premises at some time, and they need to understand what you do, and they need to like what they see

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Collins Rex: Mit. Ctl: And your online environment is also part of your physical environment. So if you are selling through e-commerce, Of course, this is key. The online environment needs to have a really great customer experience and a really great user experience one hundred and fifty.

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Collins Rex: The physical environment also includes your packaging and your branding. So what is it that the customer sees? And how does that appeal to the end? Customer?

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Collins Rex: Consider the colors that you use the imagery that you use

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Collins Rex: erez agmoni in some markets. You need an actual picture of the thing that is inside the packaging on the outside, and one tends to see that with things like mulk uh people want to to see a cow on the outside, they don't necessarily want to see something abstract that could be difficult for them to connect with the product on the inside one

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Collins Rex: and your branding. How do you have to adapt it? Because you probably cannot use exactly the same branding in every single market in the world. You might have to translate your name. You might have to consider what that translation means when you've translated it, et cetera one,

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Collins Rex: it includes your staff. So how does your staff dress at a trade show? And how does that reflect on your business.

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Collins Rex: How does your staff act towards your customers, and how well do they know your product, and how are they responsive? And this is not just for a casual queries, but when something has gone wrong, if a customer needs to get hold of somebody because an order was late or it wasn't the right quality or the right kind of product. They need to be able to speak to somebody immediately

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Collins Rex: and just quickly touching on some of those new peas, the things that we now start thinking about because of the way in which we interact with customers, and one of those is permission.

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Collins Rex: We all like to build lists of our customers. We collect all manner of data on our websites. We get people to sign up to newsletters and the like. We get them to subscribe to our blogs, et cetera.

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Collins Rex: I understand that that is a very important part of your marketing activity, but also understand how you need to treat that data. And of course we've all just seen what has happened when they is a breach of security and data is compromised because we've all seen that occur with Optus, so get permission before you use your customer data in a way that they might now necessarily be happy with one hundred,

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Collins Rex: and then also make sure that you safeguard that data.

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Collins Rex: Understand what you have to do by law in every part of the world in which you're active.

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Collins Rex: Personality means that you need to endure a brand that has character

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Collins Rex: mit ctl. And so not only do you have a brand, but that brand needs to speak to your end customers. It needs to be uniquely yours. It needs to be identifiable, and it really does need to be a persona in its own right. Two hundred and fifty,

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Collins Rex: and as more and more people spend more and more time online, and they are used to hearing things, seeing things that are customized to their own needs, and once based on their spending patterns, they have come to expect a level of personalization across all avenues of business

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Collins Rex: and marketing, irrespective of whether you are selling through traditional export or through e-commerce. So don't think just because you sell through traditional methods, and you're not selling for e-commerce that you don't have to personalize your customers want marketing exchanges from you that they see actually means something to them. Don't. Send out just those straight generic things that might not be useful to your particular customer base,

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Collins Rex: and in the remainder of our marketing session today I just want to touch on digital marketing. Now, digital marketing is one of those areas that nobody can ignore

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Collins Rex: mit Ctl. And we we all interact with digital marketing all the time, every single day of our lives, and so do all your customers. And the first avenue, the first port of call, so to speak, when it comes to marketing for most of the people who will find you is your website, one hundred and fifty.

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Collins Rex: So when it comes to your website in two thousand and twenty-two web three is the norm, and the key here is your site needs to be fast.

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Collins Rex: It needs to be secure. It needs to be mobile because most people are going to access it on their smart device. It needs to be easy to navigate. It needs to be optimized so that you can actually get the benefits from people visiting it,

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Collins Rex: and it needs to be engaging, but it shouldn't be too busy

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Collins Rex: mit ctl. And and of course, the way in which you optimize your website is through search engine, marketing and search engine optimization that we'll be looking at in a moment. You can't sell anything through your website. You can't use your website as an information portal for people. If your website can't be found, one hundred and fifty

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Collins Rex: and most people are going to find your website by using a search engine like Google, which, of course, we all know, and it is still the biggest one, but it's not available everywhere. So if you want your potential customers in China to find you. You can't just rely on Google, one

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Collins Rex: mit Ctl. And you have to look at others like by do. And Of course, there's also being in any number of other search engines, also important to know that the second most populous search engine is Youtube, so very important to look at videos and actually make sure that customers can find you there. One

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Collins Rex: sem a number of techniques and marketing methods that work in concert, the

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Collins Rex: to make sure that your company dominates the search engine results page, and this is full key phrases, questions, et cetera. And this you do in two main ways that being search engine optimization and pay per click one.

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Collins Rex: So seo, which we generally all have heard of is the process of tweaking and updating your code, and content to make sure that your web pages organically rank higher in the search results.

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Collins Rex: No.

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Collins Rex: Those crawlers who go around looking for websites and listing them. Don't speak English, and they don't recognize images the way we do. The coolers speak in Html, and they look for alternate text behind pictures, and that's how they are going to find you, and how they are going to rank you. So Seo writes clues for crawlers in a language that they understand, and it's

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Collins Rex: little bit like adding subtitles to a foreign film for the rest of us

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Collins Rex: mit ctl. And they use artificial intelligence and machine learning, and they decipher around two hundred clues to determine what a page is all about. Not just some of those are things like loading speed. The faster it loads, the better. Backlinks, optimized images, the domain age, the older a website, the less likely it is to be found one hundred,

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Collins Rex: the web page content, et cetera. So make sure that you work with somebody who understands a Ceo, because it's not enough anymore to just have a few links from a few other websites to yours. The algorithms have become a lot more sophisticated over time

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Collins Rex: ere,

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Collins Rex: but they lots of other ways to use paper click. You can advertise through social media campaigns, local services ads on Google, Youtube ads display ads, immersive ads. And here we're talking virtual reality and augmented reality, and also shopping ads which are generally are driving e-commerce, and increasingly people have shopping within content as well. So pay per click one hundred and fifty

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Collins Rex: relatively simple. To Do try to use somebody to do it on your behalf, though, because the agencies generally do a lot better at this than individual companies can,

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Collins Rex: and also understand that paper click on the surface is very cheap, but it can very quickly add up and become very expensive. So you need to be ruthless when it comes to setting and sticking to a budget

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Collins Rex: mit ctl. And remarketing is a very interesting one, and remarketing on the one hand, drives us all crazy, but on the other we actually know that it works because we all respond to it. So remarketing works like this: very basically someone visits your website one hundred and fifty

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Collins Rex: and a few lines of code from your retargeting partner, which could be Google Adword drops an anonymous cookie in the user's digital pocket, which is their browser.

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Collins Rex: And this cookie is a small file that stores little bits and pieces of info. It doesn't store anything personal because it doesn't collect anything personal, Doesn't know how to one hundred and fifty,

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Collins Rex: but it does sit there with some bits and pieces of where you've gone, what you've looked at, etc.

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Collins Rex: When the user leaves your website, when the cookies in their digital pocket. The cookie then tells the ad platform when that person lands on another site and boom, the cookie makes your ad appear on that page.

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Collins Rex: It really does work. Um. Retargeting campaigns generally have people seventy percent more likely to convert by going back to your website than they would through any other means,

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Collins Rex: the marketing automation and umbrella term that includes any form of messaging that is triggered automatically. So we talking email marketing, automated texts messenger marketing on Facebook, in mail on Linkedin, et cetera.

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Collins Rex: So

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Collins Rex: someone visits your website that into the email address uh to download something. So perhaps you have a recipe book, for example. Um to a company, your beautiful Victorian strawberries. They download that they then list their email address, which goes through to your automated system, and then it automatically sends them emails and messages They lots of tools that you can use. And you really should be doing this by automating it, not doing it manually because it takes way too much time.

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Collins Rex: A few, their active campaign shop, spring keep, and clever tap,

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Collins Rex: and then, of course, is email marketing. So it's exactly that. Um. Very important, though, that if you carefully plan and execute your email marketing, the return on investment is very high. Um, it can be anywhere from two and a half thousand to four and a half thousand percent, because it's cheap to do. And if it's done well, and it's personalized. You actually do get really good coverage. But of course, averages are not guaranteed, and some of the tools we're looking at sending blue mail

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Collins Rex: and email octopus,

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Collins Rex: one similarly social media marketing, advertising, and marketing through content that you do on any and all of the social media platforms. And again, remember that not all of those platforms are available in every single market, and just the organic postings are not enough anymore. You have to combine them with paid advertising one.

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Collins Rex: Now there are any number of trends that are coming up over the course of the remainder of this year, and things that are becoming more pronounced. Um, when you get the slides you can go through these. But just something that I want to point out is experiential. Marketing seems to be making a comeback. So this is people actually interacting and doing things rather than just being passive consumers of the marketing that you send their way.

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Collins Rex: And we all know we're still doing a lot of things online like today.

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Collins Rex: But more and more brands are doing physical things and investing less money online um in terms of events. So that's something that you have to take into account. And there is also a step towards virtual reality and augmented reality.

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Collins Rex: So once, of course, you've done all your marketing, and it's been wildly successful, and you've got customers in droves banging on your door to buy your products. You've got to get those products to them, and that brings us to freight and logistics.

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Collins Rex: So what is freight? Literally goods that are transported in a commercial bulk fashion via road, rail, ship, or more aircraft.

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Collins Rex: One you've got to consider when you choose the correct shipping method, the size of the goods, the nature of the goods, so are the goods liquid. So are you producing wines or spirits? Are you making maple syrup, for example, One hundred and fifty,

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Collins Rex: one of the hazardous materials, and you'd be surprised at what can be considered a hazardous material. So sugar, for example, can be a hazardous material in certain conditions, because it is highly flammable, as indeed is flower, one hundred and fifty.

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Collins Rex: One. Is it high value cargo? Does it need intense security? You probably don't need intense security for your apples or your oranges. But if you produce really premium expensive olive oil, for example, perhaps you do need more security than some other products. One hundred and fifty

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Collins Rex: also. Think about the quantity of the goods, the larger the volume, the less likely you are to be air freighting, for example,

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Collins Rex: mit ctl. And how can you package the goods for transport. And what are you allowed to transport in all the various types of of transport modes? There are things that you can only transport by air freight, because they are two hundred and fifty,

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Collins Rex: two dangerous to go by sea, and that might seem like a bit of a of a counter-intuitive concept that it is unfortunately the way it works. Also Think about your destination. Are you shipping down the road? And if you're interested in export, then of course you are looking at beyond You're looking at international shipping one,

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Collins Rex: but maybe you're just looking at into state initially, and that is going to affect the mode that you choose. And then, if you are an e-commerce seller, we're talking about small packages and parcels that are sent using parcel carriers and postal services.

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Collins Rex: So what are the key modes of transportation and the key players in the freight and logistic sector,

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Collins Rex: erez agmoni? So the key mode of transport for goods transportation still is road trucks. We see them on all our roads. You see them in every country in the world that you might go to one hundred.

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Collins Rex: The trucks are still the way things get from the factory, from the farm to the port, and from the port where it arrives to the shop or the end consumer on the other side one hundred and fifty,

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Collins Rex: just some concepts to be across full truckload ftl, which is sometimes also known as truckload. So This is the entire trailer space that is used to transport the freight,

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Collins Rex: and yes, fifty, three feet. The uh, the transport and logistics world still very much uses feet as opposed to meters, one

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Collins Rex: which other load might be co-located with your very fragile produce

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Collins Rex: erez agmoni intermodal uh more than one kind of transportation to take goods from Point A to Point B. So freight could arrive at the port of Los Angeles, and on a ship one hundred and fifty

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Collins Rex: and a warehouse wants it. It gets picked up by a truck or a train, and it makes its way to that warehouse.

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Collins Rex: I don't need to worry too much about chassis, but we certainly do need to worry about multimodal because lots of different things involved in the one shipment. And why is that important? One hundred and fifty,

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Collins Rex: because the way you pack it here has to take into account that it's going to be transferred from one mode of transport to another, and potentially suffer harm and damage all the way along.

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Collins Rex: You also need to consider that it could take longer than you anticipated because of those transfers that need to take place.

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Collins Rex: The next mode is rail

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Collins Rex: mit ctl, and so rail that goes on A truck can almost always go on a train as Well, um depending on what it is. So it depends on whether it's a dangerous good or not. And when we look at things like chemicals, so fertilizers, if if you're a provider of fertilizer to the farming sector, for example, you have to consider how that's going to be transported by rail two.

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Collins Rex: There's an enormous shortage of truck drivers in the United States at the moment, and also in Great Britain. Um, people just aren't becoming truck drivers. So a lot more is going by rail than once did, and rail has always been popular in those countries.

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Collins Rex: The two main methods that you probably will be thinking of when you think of shipping, and one of those is, See freight

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Collins Rex: uh seafront was revolutionized in one thousand nine hundred and fifty six, with the invention of the container, and of course we're all familiar with those metal boxes that we see on ships, and very often in shipyards, etc.

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Collins Rex: So afraid forward it will arrange space in a container with a shipping agent, and the shipping then moves to the port where it passes through customs at the point of origin.

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Collins Rex: Freight can be loaded onto shared containers or full containers, and again, once they arrive they go through customs

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Collins Rex: and some key terms that you need to be aware of. If Cl. And Lcl. Either have a full container load, whereas the entire container is made up of your goods, or less than a container load, where again, you will be sharing space with other exporters, and you Don't, determine who or what those exporters are.

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Collins Rex: Generally twenty foot and forty foot containers, forty being those big ones and twenty is literally half the size.

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Collins Rex: When you're thinking of how much it's going to cost to ship by ocean freight, it is complicated, and It is also at the moment very expensive.

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Collins Rex: But they are four main things that are taken into account, and this is what your freight forward will calculate their pricing on fuel, currency, season and capacity,

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Collins Rex: higher season, higher rights,

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Collins Rex: greater demand for capacity, higher rights,

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Collins Rex: and then, of course, there's air right now. Much of What we're talking about in the series is transported via F. Right, because it's highly perishable. It's valuable, and it needs to get to where it's going as quickly as possible. Um! If you're a fisher of lobster, one hundred and fifty,

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Collins Rex: that lobster is not going to go on a ship to get where it's going unless it's frozen. If it's fresh or live, it's going to get there by air

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Collins Rex: seafront definitely dominates global trade

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Collins Rex: mit ctl and But airf Right? Is really really important for high value and time-sensitive cargoes. And here we're talking about food of a certain nature as we've just discussed, but also things like aerospace electronics, healthcare pharmaceuticals, and the like, one hundred and fifty.

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Collins Rex: If uh yours is a vitamin that you produce. Then you're also going to want to get it there as quickly as possible,

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Collins Rex: and again some terminology to be across next flight out literally the next available flight. Um. Quite expensive to do, because it is relatively urgent one.

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Collins Rex: Consolidated just like you've got that uh Lcl. Container which is less than a full load. So consolidation means that you will consolidate your shipment with a whole raft of other exporters, and you will put them on the same aeroplane.

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Collins Rex: Now, when it comes to consolidation, you'll probably work with a consolid data, and a consolidator is a really great way for you to get into a new market. If you don't produce large volumes of goods, because they will cherry, pick all the produce that they want, all the processed foods that they want in relatively small volumes. They will put them into one shipment, and they will provide to end customers.

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Collins Rex: You're looking at air freight. The cheapest way to go is deferred where you don't have it on the next available flight, but it pretty much goes.

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Collins Rex: There is next a flight available, and there's no urgency to it. And Charter is, if you have something that you absolutely have to get there, and there isn't a commercial flight, and it's the most expensive way.

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Collins Rex: So when do you use air right to use it for perishable goods for live animals, particularly things like seafood,

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Collins Rex: the top priority cargo for immediate delivery. So um you're catering, or you're providing goods to the caterer for the next kardashian wedding, and it has to get there very urgently at a specific time. Specific place. That's immediate delivery cargo, one.

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Collins Rex: You've got extremely high value cargo that needs additional security. All you've got small quantities of goods or cargo with small volume, metric whites.

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Collins Rex: So those are the modes of transport, the main ones. Those are the ones that you will almost always be looking at, whether it be one or a combination of all the above one hundred

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Collins Rex: mit ctl. And and then those key players that will make your life a lot easier when you are sending your goods offshore, and the first one is the freight forwarder. So the freight forwarder consolidates freight services one hundred and fifty.

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Collins Rex: They arrange the consolidation of freight, the transportation, the cargo insurance of the freight. They take charge of the cargo in the ship, and they use their own bills of lighting.

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Collins Rex: Fright forward is generally coordinate shipments from destination to destination, and they use a variety of carri carriers, and they determine what is the best mix of all the above. So they're pretty much like travel agents for freight

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Collins Rex: freight forward. Just provide a variety of services, and that includes ocean transportation air transportation inland from the port of origin to the Destination Point documentation, of course, very important. And in our next session. We're going to be looking in more detail at export docs.

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Collins Rex: Your fright forwarder will also assist with customs clearance. They'll help you negotiate the best freight rate, because they buy freight and bulk, so they get much better rates than you individually would.

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Collins Rex: They will help you track your container. They'll help you with cargo insurance more commonly known as marine insurance. They will assist with the packaging of your products for shipping, transportation, and delivery. They'll ensure that the cargo is

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Collins Rex: appropriately labeled, They'll arrange way our storage, if you want it, and they also make sure that you comply with any customs regulations

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Collins Rex: and with the freight forward it doesn't do the customs broker will. So your customs broker helps you to file and clear any documentation through customs

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Collins Rex: mit Ctl. And they will help you to determine the correct Hs code for your product. So if you're not sure which is the correct harmonized code to use, they will help you do that one hundred and fifty

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Collins Rex: um question from in regard to capturing market share. Um, we'll be covering market share and in a later session, so I don't think we can do that today. It's a much bigger question than we can cover at this point. So um just keep an eye out, for when we start looking at that sort of information.

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Collins Rex: So your customers broker will give you the correct Hs code. They'll help you with the tariffs and the duties that are payable

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Collins Rex: erez agmoni any customs procedures, they'll smooth over that. Ensure that you have the correct documentation to clear any of your goods through customs, which of course, is vitally important, particularly if you have a perishable product. You don't want it sitting at customs on either side of the equation one hundred and fifty,

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Collins Rex: and they will help you with the correct rule of origin, which is very important. If you want the benefits from any free trade agreements that Australia has with other nations, and they will also help you with the certificate of origin requirements in the country to which you are sending your goods. One

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Collins Rex: we don't need to spend a lot of time on freight brokers. But do you understand that they exist? So they work as a transportation intermediary,

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Collins Rex: and they will generally do everything that you'll fright forward. It can't do to help you get the best possible right for the freight that you are needing to utilize, and they will also help you to optimize any shipping logistics that you might have.

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Collins Rex: So the freight broker reduces your transportation costs. They help you to optimize transportation routes and modes to make sure you save as much time and potentially money as possible, and they will also help to identify increased capacity on any of the carriers one,

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Collins Rex: and then three pl providers. So a third-party logistics, warehouse, or a three pl for short, is an outsourced business that takes care of your entire supply chain and logistics operations one

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Collins Rex: so simply put three pls are used for outsourcing. Third-party warehouse and distribution needs

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Collins Rex: mit ctl, and they manage your stock They manage the holding of that stock. They ship the inventory from multiple businesses or other businesses in addition to their own inventory, and if they full full and store orders for both their own business as well as clients. They known as a hybrid three pre l one

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Collins Rex: erez agmoni. So they all have specialities and sub types. So if you are going to use a threepl, and on the surface it could be quite expensive. But they will save you a lot of time and energy, allowing you to concentrate on your core business which is growing things, producing things. It's not freight and logistics one

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Collins Rex: erez agmoni, but you can find ones that specialize in fresh produce. Um, even specific kinds of fresh produce. You will find three pl's that specialize in bulk, goods, nutrosuticals, wines, and spirits, retail apparel, et cetera. So choose the right one, two, three

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Collins Rex: erez agmoni, and you'll find that you have a really great partner in your business, and he has a bit of a checklist for you. If you are considering engaging a threepl, consider the area of expertise how credible they are, so speak to others that might have used their services and find out how good they are at what they do, one hundred and fifty

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Collins Rex: the network of locations. So if you use a three pl. Make sure that they are not just local, that they have locations in as many places as possible, particularly in the market, to which you're actually shipping one hundred and fifty

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Collins Rex: erez agmoni. The price, of course, is important. You don't want one that's too expensive, but the cheapest one is probably cheap for a reason. What is their customer service like? Because that's very important. One hundred and fifty

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Collins Rex: mit Ctl. And uh, how safe are they? So How do they treat your produce? And this is particularly important when it comes to food, handling and food, safety and maintaining of coal chains? What sort of technology do they use? And is that technology compatible with yours? So are they issuing their bills of lighting, for example, And that system is compatible with your online invoice one.

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Collins Rex: How efficient to that. That goes without saying, I think. And what is their freight management, capability, and capacity like

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Collins Rex: they also be in mind that there's four pl. To which is a step above three Pl. So they do everything that the three pl's do um, but they also manage your three pl's for you.

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Collins Rex: I want to spend a little bit of time on inco terms. I'm. I'm conscious of the fact that inco terms Well, it's a whole subject in and of itself, and under normal circumstances we can spend an entire day discussing inco terms, and we really have just a few minutes today. But if you are going to be exporting, and you are going to put anything on any mode of transport, and you're trying to get it from your premises to another one on the other side of the world.

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Collins Rex: You do need to understand inco terms, and you do need to understand the implications of using the wrong one

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Collins Rex: so inco terms or international commercial terms, are a series of predefined commercial terms that are published by the international Chamber of Commerce.

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Collins Rex: An inco term is a three-letter trade term that is related to common contractual sales practices,

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Collins Rex: and they're intended primarily to clearly communicate the tasks, the costs and the risks associated with the delivery and transportation of goods with essentially the carriage of goods,

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Collins Rex: so inco terms inform sales, contracts,

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Collins Rex: but please An inco term is not a sales contract of itself. The danger occurs that if you quote a certain inco term,

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Collins Rex: but you have clauses in your contract of sale that are different from what the inco term implies, you open yourself up to a mine field of potential litigation and non-payment

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Collins Rex: mit ctl and the latest iteration is in cartoons two thousand and twenty, they tend to revise them every ten years or so, and in Ko terms two thousand and twenty supersedes all earlier iterations. So if you are familiar with inco terms, and you might find yourself still using inco terms two thousand and ten one.

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Collins Rex: Get rid of it immediately, and get yourself a new copy.

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Collins Rex: So there are two main categories of inca terms there in cartoons that are used for sea and inland waterway transport only you cannot use these terms. If you are transporting your goods via if right,

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Collins Rex: so free alongside ship if I is,

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Collins Rex: that's exactly what it stands for, and it sort of makes sense that This is stuff that is provided up to a certain point, and is alongside a ship,

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Collins Rex: if I be, and we find that people tend to use if i'd be as if it were one of those terms that is translatable to any mode of transport. But it's not so you can't use. If i'd be, if you using, if right, and it stands for free on board. Cfr. Is cost and fright, and c. If another one that tends to be used all the time cost insurance and freight, and if we look at where the risk shifts when we look at these terms

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Collins Rex: from the seller. In other words, you, the exporter to the buyer, the customer. You can see that it shifts substantially from Fis all the way to C. If, and it shifts from you to your buyer across the way.

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Collins Rex: So in the case of free on board you as the seller, take responsibility for the carrier and for the port, you also take responsibility for the loading at the port in Australia, and as soon as that good makes it onto the ship one hundred and fifty

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Collins Rex: then, and that means it's crossed the ship's rail. The responsibility and the risk shifts to your buyer, and so you can see how it works across the board for those modes of transform.

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Collins Rex: Now, the ones that you probably going to be using most commonly now will be these in code terms, because they are applicable to any mode of transport. So whether you are transporting via ship via if right, via rail, and that doesn't apply so much for us, because we don't have rail that connects us to another country, but it can apply if you are shipping from Australia into Europe, for example, and then putting it on a on a train

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Collins Rex: from one end of Europe to another, and here we have X works, which is also one of those it gets used all the time.

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Collins Rex: If Ca: which is free carrier, Cpt. Carriage paid to cip, carriage and insurance paid to as opposed to c. If which is used only for C Dpu delivered in place unloaded. Dip delivered it. Place and Ddp. Delivered at duty paid

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Collins Rex: again. Similarly, you can see here where the balance shifts from you, the seller,

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Collins Rex: the buyer, and what is the most risky for you, as the seller is, X works

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Collins Rex: the least risky for you, because you take no responsibility As soon as those goods have been picked up at your warehouse or at your farm date. It's also important to note that in cip insurance is paid for by the buyer, so that is also a key one.

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Collins Rex: The inco term you choose is also going to very often influence the price that you charge

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Collins Rex: erez agmoni. I know we've trotted to just the basics of inco terms. But i'm more than happy to share more information offline. Um if you would like any specific information that relates to your business, and to get a copy of the latest inco terms, and all the rules and regulations that go with them. One hundred and fifty.

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Collins Rex: You can get it from the International Chamber of Commerce,

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Collins Rex: and i'd like to end today by just looking at the current state of freight.

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Collins Rex: Of course we all know that we've lived through a pandemic, and to some extent still are, and many countries in the world are still disrupted, and one of the main ones is China, where there are still hard lockdowns in place, and that fundamentally affects the port operations.

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Collins Rex: So since the start of the pandemic we've seen that port operations have become a lot more fragile than they once were, and this is partly because Staff has been off sick, lock down. Rules have prevented people going to work, and the like shipping schedules have been disrupted.

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Collins Rex: So if we look at schedule reliability, for example, in August the twentieth twenty one, it fell to its lowest in ten years.

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Collins Rex: Ports are also congested. There are shortages across the board of Shipping containers, ships, space on battles and truck drivers, As I mentioned earlier. This,

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Collins Rex: and there are a cargo disruptions as well, and this means the trait rights are at a really high level when it comes to, if right, and every time a flight is cancelled and an inconvenience is a passenger. It also means the freight that should have been on that flight does not go.

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Collins Rex: These are all things that we need to take into account, and trucks are also waiting a lot longer to collect cargo, because the handlers of cargo are also impacted just like the baggage handlers

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Collins Rex: freight rights on all the key. Global trade rules. Routes have increased from around a thousand Us. Dollars in May, two thousand and twenty to around seven and a half thousand dollars in September, two thousand and twenty-one. But that has come down a little bit. If you look at the graph. Um, but it is still substantially higher than it was in July. Nineteen

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Collins Rex: mit ctl and and freight prices are going to remain high, So how does that impact you getting your apples, or your pears, or your strawberries, or your gin, or your wine into the hands of a foreign customer? One hundred and fifty.

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Collins Rex: The frightrates have to be absorbed somewhere.

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Collins Rex: They've also been supply chain pressures, and this, of course, Covid in China, but also the Russia Ukraine war rising oil prices, and we expect that none of these issues are going to be resolved before sometime next year.

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Collins Rex: So in two thousand and twenty-three we do expect delivery of new vessels for shipping lines, and that means that the congestion should ease and equipment will become more readily available. Freight Rates should begin to stabilize, but they're not likely to come down just yet. One hundred,

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Collins Rex: and of course, reduced capacity is still going to be with us.

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Collins Rex: So, moving into two thousand and twenty. We hope to see that the market will start to return to some level of normality. New capacity will enter the market, as those new carriers come on stream one hundred and fifty,

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Collins Rex: and of course there'll be new policies and procedures in place, and freight rates will stabilize and hopefully also start to come down,

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Collins Rex: and that brings us to the end of today's session. Now I do know that we've covered a great deal of ground in today's session. But if you do have any questions, please feel free to type them in the chat box, and i'm also going to invite uh our colleagues from agriculture, Victoria to turn on their cameras, and if you have any questions for them about future programs Um, anything that you might want to know about the activities in pathways to export, or indeed any of the other programs,

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Collins Rex: have feel free to to raise that with them.

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Collins Rex: So in the Q. A. Box, if you have any questions, feel free to type them in there, that you would have noticed that today's session has been recorded, and we'll make that available to you, and we'll also be making the deck available to you after today. And if you can't think of any questions now, because you said, you know a lot of ground. Um, he'd probably spinning a little bit, feel free to reach out to the team, and we'll also take those questions offline,

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Collins Rex: and I will also be making available to

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Collins Rex: mit Ctl. And a few templates for you after today's session, including a market marketing strategy template, which you are more than welcome to adapt to your own purposes and for your own business, and of course i'll also send you some costs around exporting, so how you calculate your export costs two hundred and fifty,

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Collins Rex: two weeks from today same place, same time. The next session, which is all about export documentation, and of course vitally important to get that right. If you are starting to export for the first time,

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Collins Rex: don't see any questions coming up. So let me uh do this and make sure that you can see all our colleagues. Um. And if you have any of those questions, please feel free Guys Doesn't: Look, I think we've stunned everybody into submission here with the volume of information that we've invited to them. Uh. So I don't think we do have any questions, but, as I said, feel free to type those questions um, or send them to us offline, and we'll be more than happy to deal with them

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Collins Rex: mit ctl, and so all that remains in is to say, Thank you. Will. Thanks, Jay. Thanks, Shanks, for your your abilities and for being online with us today and waiting. To answer those non-existent questions, and we look forward to all of your company again in two weeks time. One hundred and fifty

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Collins Rex: Thanks. Everyone have a great afternoon do some good business

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Will Dalton: uh say that everyone

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Collins Rex: thanks for everyone. Goodbye.

Speakers:

Jai Jackson-Jin, Policy Officer – Pathways to Export
Collins Rex, Trade Specialist and Series Facilitator

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Collins Rex: Good afternoon, everyone, and welcome to today's session. It's my great pleasure to introduce you to Jay Jackson, who is a policy officer with the pathways to export team. She has experience in international policy analysis, and she worked in tertiary education before beginning her career in the public sector

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Collins Rex: mit Ctl, and having grown up as an expat in Japan and Egypt. J. Is passionate about international relations and supporting the growth of Victorian agri-food businesses to start off our session. I'm delighted to pass over to J. One.

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Jai Jackson: Thank you, Collins, and good afternoon, everyone. I'd like to begin by acknowledging the traditional custodians of country and pay my respects to their elders, past, present, and emerging, and to the continuation of their cultural practices and connection to the living environment. I acknowledge any aboriginal and Torres Strait, Islander peoples who may be on the call today,

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Jai Jackson: and acknowledged that sovereignty was never seated, and that it always was and and always will be aboriginal. And um thank you all for attending the third session of agri-food export essentials. As Collins mentioned, my name is Jay and i'm a policy officer with the pathways to export team here at agriculture, Victoria. One.

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Jai Jackson: We'll be here throughout the session and welcome your questions, using the Q. A. Function below on your screen, and at the conclusion of today's session we'll be bringing up a quick zoom survey, and would really appreciate your feedback. The survey is also an opportunity for you to express your interest in an in person workshop which will be held. Following the conclusion of this Webinar series,

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Jai Jackson: we look forward to staying connected and supporting you on your pathway to export, and i'll now like to hand back to Collins Rex, who'll be taking you through the remainder of the session. Thank you. Two hundred and fifty.

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Collins Rex: Thanks very much, Jay. And yes, as Jay mentioned. Uh, I am Collins, Rex and i'll be your presenter for today's session, and remember that. Q. A. Box. Any questions that you might have over the course of Today's session. Please type them in the Q. A. Box. Don't wait until the end, because you may very well forget your question, and then you might not get round to asking it to make sure that you type those in I will, between myself and the pathways to export team. We'll keep an eye on that box, and we'll make sure that we take your question

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Collins Rex: it arises, or keep it to the end of It's not exactly relevant to the conversation at the time

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Collins Rex: i'd like to add my acknowledgment to jays, and particularly to the owners of the land on which I'm residing, and that be the land of the warundry people of the coolant nation; and I pay my respect to elders, past, present, and future, and I extend that respect to any aboriginal and Torres Strait islanders, peoples who might be joining us on today's session.

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Collins Rex: Now, today's session is a big one. We've got a lot of stuff to cover over. A lot of it is quite technical, but please don't be daunted by some of the uh, the density of the slides. Today. Um! You will get access to the slides as well, so make sure that you refer to those as and when you need to. And as you can see on your screen, we're going to be covering a few main areas today, including preparing your product for export,

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Collins Rex: and we're going to cover on the basics there with the possibility for adding more detail in that future session. If that is what you require. We're also going to go through export documentation, basics and procedures, and you can see that there's quite a lot of stuff that we're going to be looking at there today, all of it really important. We're also going to touch on getting paid. And of course that is all important when you are doing business overseas.

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Collins Rex: Finally, today we're going to be covering off some foreign exchange basics,

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Collins Rex: always questions in the Q and A. Box.

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Collins Rex: So let's get straight into it, and we're going to start today with preparing your product for export.

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Collins Rex: Now, of course, export is a cycle. You start with, developing your product to your service. You promote that product and service. If it works well, you eventually get to the point where you have a sales contract, and once you've got that sales contract in place. You're then going to prepare your goods and services for export.

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Collins Rex: You're going to ship them off to your client. You're going to be paid for them. They will make their ways into the hand of the client. And then you're going to stop that whole cycle again. Now the important thing about the export cycle is to understand that they are intricacies along every step of that export cycle, and you need to be conscious of the fact that it is a continuous process. One process never really ends before the other begins, and the cycle is on.

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On going

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Collins Rex: you also need to take cognizance of the fact that at every step of that export cycle you need certain skills, certain expertise and knowledge. But you also need to be able to invest the right amount of time and the right amount of money, because every part of the cycle is going to involve investment from you.

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Collins Rex: Now, one of the most important things along that export cycle is to ensure that your product is ready for export and not just export in general, but export to every particular market that you might be considering, because every market is different and every market has its own requirements. So some of the things that you have to think about, and we'll step through some of these. But of course they are any number of others that you need to take off license of as well.

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Collins Rex: One of the first things is the sizing of your packaging and your product. So you need to think about. Let's say, for example, if you are an exporter of fresh pasta, and in Australia your fresh pasta is put in packages that goes into the fridge, and those packages are five hundred grams in white. You might find that if you are exporting to Japan that five hundred gram package is going to be too large for the average

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Collins Rex: Erez Agmoni, each household, and therefore the supermarkets might request that you package your pasta in two hundred and fifty grand packages, and of course, that means you're going to have to rethink how you package. You might have new packaging that you have to come up with new branding, et cetera, one hundred and fifty grand.

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Collins Rex: Your brand name might not translate into a foreign language, or the colors or the images you use might not be appropriate for a particular market.

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Collins Rex: You also have to think about the customer benefits. If you are promoting something on the grounds of its health benefits in Australia, and it might be acceptable here to do so. It might not be in another country. You might not, for example, be able to make claims about your fresh produce being healthy or good for you in certain markets you have to rethink the language that you are going to use. If you are exporting into a Muslim country, you're almost certainly going to have to consider, Halal said,

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Collins Rex: and that is, this is across the board. It's not just for processed food, it.

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Collins Rex: Think about how you represent your product. What is on the outside of that packaging. Perhaps you have some fairly abstract imagery which is great for the Australian market,

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Collins Rex: Mit, c.

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Collins Rex: One of the ingredients that you use. And do you need to change those ingredients in order to satisfy requirements in a new country? And what are the customs requirements in that country? And how do you comply one hundred and fifty.

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Collins Rex: You also need to think about the a-it code that you need to apply to your product when you're exporting it,

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Collins Rex: You're not going to be using an a heck code if you're just trading domestically. But as soon as your product leaves Australia it needs that all important code, and that code does not just deny, donate what the product is, but also the way in which it is treated when it arrives in the country to which you are exporting it, what duties it attracts, whether it is part of a quota requirement, et cetera, and what you see on your screen there is a little extract one hundred

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Collins Rex: from the A Hec code book that you will get particularly for Japan in this case, and you can see that any number of things are ascribed to that product. You also need to think about your product liability, insurance. It might be more onerous in other countries. What are the terms of service agreement, documentation that you have and do those comply with local law, and then, of course, returns warranties, replacements.

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Collins Rex: Now you're not likely to have a warranty on a fresh product, but you might have to replace it if it is deemed to be passed as shelf life, et cetera.

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Collins Rex: Now some of the specifics that you need to think about when it comes to adapting your product. Go around packaging

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Collins Rex: It's one thing to put something on a truck which is transported from one side of Victoria to the other. It's an entirely different thing when that packaging has to withstand the rigors of airf right, all possibly even see fright depending on the mode of transport that you use. How is that going to affect your product?

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Collins Rex: And what does the consumer want on the other side of the world. Do they want packaging the same as here? Or do they want something different?

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Collins Rex: One of the local market requirements? Now there's the needs and the wants of your customers. But there are also the regulatory requirements in those particular countries, and it's not up to you to determine what you will or will not do if there is a regulation that dictates one hundred

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Collins Rex: Also, think about the cost. Of course, if you're changing, packaging, if you're changing the sizing that you normally use. If you're changing the shape that you might be using, that is going to incur costs. And how does that affect your bottom line one

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Collins Rex: also think about those not so favorable conditions. So if your chocolate is perfectly packaged for Australian conditions, and you're sending it to Indonesia, where not only is it a lot hotter? Just about all of the time? The humidity levels are considerably higher. How are you going to have to adapt what you do to keep that product in premium condition.

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Collins Rex: The legal requirements, of course, you have to take into account,

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Collins Rex: and then there are things like environmental legislation rules. So you might have packaging. That is plastic. You might not be allowed to use that plastic packaging in another country, or if you're using natural packaging, which you probably already are in Australia. You might have to conform to certain regulations otherwise. And then, of course, there's merchandising and storage, one

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Collins Rex: labeling Well, that's a whole other ball game.

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Collins Rex: Every country has its own legal requirements for what has to be on the label of a product, and this particularly pertains to food stuff with the processed all fresh. So what are those legal requirements? What are the local language requirements? If you're exporting that same chocolate to Indonesia, your label is going to have to be in Bahasa. It can be in English, too, but it has to be in Bahasa Also Think about the requirements that are dictated by

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Collins Rex: mit Ctl. And local customs, all local religions. So if you're exporting into the Middle East, for example, and your imagery on your labeling might include images of people. You might rethink that if you're going to go into the Middle East, because images reflecting faces, for example, are not really acceptable. So you might have to think about how you going to approach that. Also Think about what your consumers need. Two hundred and fifty,

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Collins Rex: and maybe they need more instructions on a label than we do in Australia, and you might have to add some more detail There also think of any special marks that you have to show to one hundred

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Collins Rex: mit

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Collins Rex: mit ctl, and when it is put on a shelf in another country, things like use by dates and so forth. And here you can see just two examples of labels. One is in Indonesia, the other one is in the United States, and you can get a sense of the sort of information that needs to be on labels in those two countries. One

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Collins Rex: important to note on the Indonesian one as well on the left hand side of your screen that it has clear instructions of how to use this particular product, and those are in the form of illustrations.

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Collins Rex: Now, just one example: if you are exporting into China, For example,

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Collins Rex: the two Thousand and fifteen Food Safety Law tells us that prepackaged food has to be labeled, and it has to include all the information that you see on your screen. That's everything. You cannot choose to have some of it. You have to have all of it,

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Collins Rex: and There are various other things that you need to have in place, including the standard with which you comply, et cetera. And you also need to have that in Chinese

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Collins Rex: erez agmoni. Now I just want to pause a moment on halal certification. You might ask yourself, Why is it that you want to allow certification? Well, of course, if you are exporting to Muslim countries, including Indonesia, Malaysia, Saudi, and the Uae, you have to have your goods Halal certified because they get before they are accepted one hundred and fifty

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Collins Rex: mit ctl. And there are any number of Australian organizations At last count They were about twenty-two of them that would issue the necessary certification. But go along to the address that you see on your screen for the full list of certification bodies, one hundred and fifty

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Collins Rex: mit ctl, and and of course it's not just hullal certification. If you're exporting to Israel, you're also going to have to have kosher certification. So think about where you're exporting, and make sure that your goods comply in every way they should, but also in every way that they need to to when you a marketing advantage one.

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Collins Rex: Let's now look at export documentation. Now,

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Collins Rex: most people, myself included. When you say the word documentation, my eyes roll to back of my head, and i'm thinking to myself, Oh, boy, do I really need to be thinking about this? Well, the reality is, if you're going to be exporting, and if you're serious about exporting Documentation is going to be a part of your life. You might have somebody that assist you in the form of your fright. Forward, or your customs broker. But you need to be across all the documentation that you need to make your export business

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Collins Rex: erez agmoni is not only successful, but also compliant, and there are really five main categories of documents that we're going to look at. In brief, today there are the Australian Government requirements. There are commercial documents, transport documents, one hundred and fifty

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Collins Rex: documents that can be required by the importing country, and then those special documents that are issued by Australian agencies for certain goods that are being exported

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Collins Rex: erez agmoni. So, starting off with the documents that are required by Australian authorities, and the first of those is the export declaration. If you're exporting anything from Australia, you have to report it to Australian border force, or the Abf. One hundred and fifty one,

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Collins Rex: and you need to do that, using either an export, declaration or an exemption code. If you don't have an exemption code, and they not that many of those, if you Don't have an exemption code. You have to complete an export declaration. So if the goods are worth more than two thousand dollars, or you need an expert, permit be, and this is regardless of the value of the goods, or you're claiming some sort of drawback on those goods

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Collins Rex: mit ctl, and all that are dutyable or excizable goods and export declaration has to be completed. So what is it? It's quite simply a statement that you make as the exporter or your agent can make it. That provides information concerning the goods and the export transaction. One hundred and fifty.

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Collins Rex: You can lodge it electronically through the integrated cargo system or Ics, or you can go physically into an office of the Ivf, and you can do it in person at a counter. The important thing to note is that you need one ed for every consignment of goods that you export

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Collins Rex: mit ctl and and uh consignment doesn't need to be a single package. It can be a number of different packages, provided that all goes to the same customer under the same number one hundred and fifty.

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Collins Rex: Once you lodge that export declaration. You're going to get an export declaration number

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Collins Rex: mit ctl, and which is literally a number nine alpha numeric characters. And you're going to put that on all your documentation, irrespective of whether you are exporting by see or by air. It's really important that you do get your ed in, and that you quote the Edm. Wherever you are required to quote it, one hundred and fifty,

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Collins Rex: and that's what it looks like. It's a form like any other government form that you can imagine, and you complete all the bits and pieces on that form, and that then triggers your ed in.

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Collins Rex: Now. I mentioned a little bit earlier on,

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Collins Rex: eh, Heick? Which is the Australian harmonized export commodity classification. The Australian version is really just another couple of digits that go on top of the hs, system, and we have talked briefly in previous sessions about the Hs. System, the tariff coding system that you use for your goods. You have to have an a heck number. If you are exporting goods from Australia, two hundred and fifty,

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Collins Rex: and that number will denote what the good is, what it's made from, whether it is something that is grown, and it's wholly Australian produced, or it's had some processes added to it, and it will also determine how that good is treated when it arrives in the country to which you are exporting it, and that includes things like duties and tariffs, whether it's part of any quota regime, whether there are indeed any protocols in place for you to export those goods into a particular,

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Collins Rex: a country.

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Collins Rex: The export of agricultural goods has its own set of rules and regulations from Australia and the Department of Agriculture. Fisheries and Forestry controls the exports of all agricultural products. From Australia

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Collins Rex: so export commodities controlled by death are listed all prescribed in the Export Control Act,

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Collins Rex: and that ensures that all of these commodities meet importing country requirements and a fitful purpose, and that means fit for human consumption, accurately described and labeled, and fully traceable, if required by law one.

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Collins Rex: Now the list of prescribed goods you can see there, and It includes everything from milk and will products through to things like wood and wood chips

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Collins Rex: mit ctl. And And if you want to know if your product is on that list. Go to the daft site, and you'll also get some step-by-step guides to exporting all the different categories of agricultural goods. One hundred and fifty.

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Collins Rex: So those are the documents in broad terms required by Australia before you can export a good, and of course part of the export process is transporting the goods, and that brings us to the commercial documents that precede that transport process. One

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Collins Rex: commercial documents are all those things that would normally be part of commerce. So if you're transacting within Australia, you're going to need an invoice. You're going to use a packing list, et cetera. But there are a number of others that coming to play when you are exporting, and the list includes things like the commercial invoice. There's a bull of exchange, your marine insurance certificate, et cetera.

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Collins Rex: So, starting off with your packing list,

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Collins Rex: you must have your goods packed in accordance with the order that you've received, of course,

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Collins Rex: but you also need to keep a very accurate list of what is within your package, and that is the outside of every single package needs to contain the packing list that the packing list will include things like the reference to the invoice. The number of cases, whether this is case, one of fifty or case, one of two, etc. The container and the seal number of that container. If it's applicable,

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Collins Rex: your packing list is not going to show the unit price or the invoice value of the goods inside that package. It's also very important to note that the packing list has to be

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Collins Rex: accurate, including every single thing in that package. So If, for example, you are an exporter of craft, General, and your packing list contains all the details about the bottles of gin in that package.

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Collins Rex: But you have a special promotion at the moment, and you've produced some T-shirts, and you decide to include twenty t-shirts in the carton of gin bottles for your customer,

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Collins Rex: but because they free you're just giving them away. You didn't think to include them on the packing list.

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Collins Rex: That is a contravention of the rules and regulations of the customs authority if that package were to be opened for inspection, and they are expecting to see gin bottles and what they see is gin bottles and t-shirts one

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Collins Rex: mit ctl, and you have made a false declaration, and your packing list is not accurate, and you can be in a great deal of trouble, so make sure that you include every single thing that is in that package one

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Collins Rex: your commercial invoice. Of course everybody knows what an invoice is. We all have them. We use them daily, whether we do it out domestically, trading or internationally. So make sure that your invoice has all the necessary information that your custom will require in order to pay you, and you can see a whole list of things that you're going to have on that invoice

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Collins Rex: important to note that you're also going to include on that invoice what the inco term is that you've used. So whether you're using free on gold, etc. Because that is going to determine again how your customer pays for the goods, and also very important to note that you're going to include your ed in on that invoice, and you're going to include your country of origin, which of course, you would not be doing if you had an invoice issued domestically.

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Collins Rex: The next document that I want to bring to your attention is the bill of exchange.

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Collins Rex: Soon as goods crossed national boundaries. There are different currencies in place, different banking systems, etc.

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Collins Rex: Mit ctl. And and if you are going to be paid through the banking system as opposed to getting a credit card payment, For example, if you transacting through the banking system. You're going to have a bill of exchange or a draft that essentially ensures that you get paid two hundred and fifty.

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Collins Rex: A bill of exchange can be in any currency, but it does depend on the agreement between the parties concerned, and bulls of exchange can also be known as sight, draft or terms, or after-site drafts,

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Collins Rex: mit ctl, and and again a number of different details that you will be including on that bill of exchange. It's a relatively old fashioned method of payment now, but it is still used, and it's still used in particular countries. So the United States, for example, is quite old fashioned in the way in which they transact internationally, and they might still require these to be done one hundred.

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Collins Rex: The next thing, of course, is your insurance certificate, not one of the vagaries of international trade that we call these marine insurance certificates. Even if we're using air transport, So essentially it is the insurance that you have on the goods that you are sending out of Australia,

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Collins Rex: and you're going to have to have proof of this as part of your documentation, and whether you are going to be claiming or your customer is going to be claiming in the case of loss,

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Collins Rex: you still going to have that certificate as part of it, and part of that requirement is that generally you're going to make this exchangeable. If you allow your customer to be the person that claims rather than yourself.

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Collins Rex: Now you've got the interim documentation that we've just talked about. Once you actually start the shipping process itself, and the movement of goods. That's when you start moving into the world of transport documents.

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Collins Rex: And uh, let's look first at, if right, because many of the goods that we are considering um that you have as part of this series will be transported via a freight.

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Collins Rex: So the following documents make up part of your if right documentation, There's the shippers letter of instruction. There's the air label parcel, post receipts if you posting things and Korea dockets,

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Collins Rex: so the shippers letter of instruction is a document that is sent to your fright forward as part of those Abf regulations which is proof of instruction to the forward by the exporter. So this document actually gives the authority from you, the exporter to the freight forwarder to move those goods on your behalf.

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Collins Rex: And again, yeah, you can see the number of details that you need to include on that shipper's letter of instruction

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Collins Rex: mit ctl. And important here to note that you're going to have the at the airport of loading as part of that documentation, and also the flight number on which that freight is being transported, the date of departure, and then the airport of discharge. So where it's being sent from, which could be Melbourne Telemarine, and where it is arriving, which could be one hundred and fifty

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Collins Rex: lax in Los Angeles, For example,

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Collins Rex: the next document is the air label or awb. All types of transport, whether they be road. See a have documentation that covers the movement of freight. They're all slightly different, but they all serve the same purpose. And in the airline industry one hundred and fifty

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Collins Rex: lots of different wavelengths have come and gone, but the universal air label is the one that is used today. It's used by all participating airlines, which is most of them, and certainly all the large ones, and all the fright forward is worldwide.

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Collins Rex: The air label contains lots and lots of different line items, and I will send you a more detailed list. So all those little dots with numbers on them. You'll get some information as to what each one of those denotes.

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Collins Rex: The air label is quite a complicated document, because it covers a raft of different air regulations as well as just the carriage of goods.

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Collins Rex: It's a document which, when it's signed, becomes the contract of carriage between the carrier and the shipper. It acts as a receipt, so that the shipper has proof that the airline has received the fright in good order one,

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Collins Rex: and it's used as the prime customs declaration. So it's always presented to customs for the clearance of a freight. One

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Collins Rex: airline staff also use it to refer to any instructions that might relate to the handling or the dispatch and the delivery of the freight. So whether it's a consignment, note, or a label. And it's also used in terms of billing. The agent.

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Collins Rex: Now,

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Collins Rex: seafrite has a whole other raft of documentation that are included, including the pre-receval advice the interim receipt, the bull of Lading and the wharfage entry.

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Collins Rex: So let's look at the pre receival advice. This goes back to two thousand and four. When shipping lines, and the Steve adoring industry implemented an electronic cargo receival process for just about all export containers, and it was really a part of making the industry more efficient, but also more transparent, and making sure that it was easier to trace goods in the system

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Collins Rex: erez agmoni. It's mandatory for all containers, whether they've got stuffing them or not. If they're going to Patrick's to Dp. Or to Hutchinson terminals, which is most of the terminals in Australia, one

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Collins Rex: again, you will get access to these slides, so you can go through this process, and you can see how this document tracks the goods from the shipper through the terminal and eventually onto and through the shipping line.

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Collins Rex: Now the other document, which is very important for seaf right is the bill of lighting. So, just as you have. You have an air label. Your bill of Lighting. Is this document that is going to ensure that everything that pertains to the shipping of your goods on a cargo vessel is contained, and the any number of terms that you need to be comp familiar with when you are thinking of your bill of lighting,

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Collins Rex: and that includes things like freight prepaid, which indicates that you, the shipper, has paid for the freight or freight collect, which indicates that your customer on the other side of the world is paying for the freight when it arrives, et cetera, one

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Collins Rex: mit ctl, and you can go through these at your leisure. But there any number of terms that you need to be across um one of those being trans shipment. So this is, if you moving your freight from Australia through another country to the end destination. So be aware of these terms, and make sure you use them correctly. One hundred and fifty.

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Collins Rex: Your bill of lighting looks like this. And again you can see um a number of different line items, all of which need to be completed before the goods will actually be accepted for carriage by c.

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Collins Rex: Now the next set of documents is those that are required by the importing country so we've gone from what Australia requires through pre-shipment, shipment. And then what is requirement? When the goods arrive at the customs agency on the other side? One hundred and fifty,

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Collins Rex: and the main ones. There are certificates of origin, consular embassy, stamping and pre inspection certificate.

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Collins Rex: Now, the certificate of origin

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Collins Rex: is something which you are going to need, particularly if you want to make use of the specific benefits that accrue to your product under a free trade agreement. So if, for example, you're an exporter of dairy products like butter or milk or cheese, one hundred and fifty,

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Collins Rex: and you are sending those goods to China. We have a free trade agreement with China under chapter that Free Trade agreement has certain benefits for Australian exporters of dairy products, and those benefits are mostly around duties. So we pay less duty on Australian goods entering China than another nation might, in order for you to claim those preferential treatments on your dairy product.

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Collins Rex: You have to have a certificate of origin that denotes that those goods actually arise in Australia.

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Collins Rex: And now it's not just free trade. Agreements that require certificates of origin. Some countries require certificates of origin to determine where goods have originated, because they are treated in a certain way, irrespective of whether there is a free trade agreement in place or not. One hundred and fifty

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Collins Rex: certificates of origin are issued in Australia by a Chamber of Commerce, or in and a registered part of the Chamber of Commerce. So in Victoria, for example, Becky,

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Collins Rex: now a certificate of origin is issued Once all the conditions pertaining to the rules of origin have been met,

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Collins Rex: and you have to understand what the rule of origin is depending on the Free Trade agreement that you are going to be invoking, and that will then determine what your certificate needs to contain, and the terminology of your certificate.

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Collins Rex: That's usually the chambers of commerce that issue These, if you're in the wine industry, though wine, Australia also issues. Certificates of origin,

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Collins Rex: pre-shipment inspections are interesting documents. These are documents that pertain to the goods having been inspected in Australia before they actually leave Australian shores

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Collins Rex: and it was something that came about really to stop goods being exported

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Collins Rex: for purposes of getting currency illegally out of a country. So the first cis agreement was signed in one thousand nine hundred and sixty-five, between the Government of Zaire actually, and the Pre-shipment Inspection Agency Society. Get it all the surveillance and that was because Zaire had noticed that they strict exchange controls in place, and people were exporting goods and putting a higher value on them than they were actually worth in order to get money out of the country.

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Collins Rex: So it is a physical inspection of goods, and once that physical inspection has occurred, you are then given a document that states what the goods are, what their value is, et cetera.

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Collins Rex: Every country has different requirements, including the level of intervention. The list of exempted goods, prohibited imports, restricted imports, labels, markings, et cetera

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Collins Rex: erez agmoni. You will not really encounter a pre-shipment inspection unless you're exporting goods into a country that has strict exchange controls, for example, or if there's a country that has one hundred

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Collins Rex: particular regulations that pertain to the movement of currency, etc.

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Collins Rex: What is more likely to occur is the commercial inspection. Um. And this is when either you, as the exporter or your customer, the importer requests an inspection company, also known as a superintendent's company, to act as an independent representative, one

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Collins Rex: mit ctl, and to verify the consignment to be shipped, conforms to the contract, and also the letter of credit specifications and their number of things that that inspection agency will look at one hundred and fifty.

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Collins Rex: Once they've gone through that process. They'll then issue a certificate of inspection, and that certificate of inspection will be forwarded onto the party that has requested the inspection to be done.

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Collins Rex: And finally, it's those special documents that relate to specific things, including things like health certificates. So the health certificate or the certificate as to condition can be required when you export perishable goods

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Collins Rex: mit ctl, and that are not subject to the restricted goods regulations that are administered by the Abf. So here we're talking about things like canned food, confectionery, packaged foods, et cetera, one hundred and fifty.

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Collins Rex: If you're not sure about whether you need to go down this route, just check with Abf. They'll be able to tell you whether you need to get that health certificate before you ship.

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Collins Rex: It can be issued on your letterhead. It doesn't have to be a specific certificate, but

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Collins Rex: but it's generally going to be completed by an appropriate Chamber of Commerce, just like the certificate of origin, will be done.

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Collins Rex: Government Authorization is required. The inspection is going to be undertaken by death.

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Collins Rex: One of the other special documents that you need to be aware of is the Karna and the Karna is one of those things that can actually save you a great deal of money. The Khan is our international customs documents that allow duty and tax-free admission of goods temporarily imported under certain international conventions,

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Collins Rex: mit ctl and now you're not likely to be exporting, and then re-importing the same fresh produce or the same processed food. But it is important to note the at A.

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Collins Rex: This is used If you are exporting goods specifically for purposes of exhibitions, fares, and events, or if you are sending samples or advertising material, because that means you don't have to pay any duty or your customer doesn't at the other end, one hundred and fifty,

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Collins Rex: so it can save you a lot of money, and certainly it stops you having to draw back any duty. So it's also a cash flow management tool.

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Collins Rex: Other documents that you need to be aware of is the certificate of free sale certificate of analysis. Um. So in some cases the wall. Testing authority, for example, provides analysis, reports on wool bails before they get exported certificate of manufacture which some of your customers might require. The suppliers declaration of conformity, et cetera, any number of other documents that can be quite specific to certain sectors and certain

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Collins Rex: Mit. Ctl, and that's so check the requirements, and that brings us to the importing country requirements.

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Collins Rex: It's a resource that is there for exporters of Australian agricultural products. And of course you will comply with the Export Control Act. If you are exporting agricultural products,

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Collins Rex: and my call provides detailed importing country requirements for meat, for dairy, for plants, for fish, for live animals, for eggs for those goods that are not prescribed, including honey and processed foods, and also organics.

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Collins Rex: And the important thing with organics is, it includes organics, equivalence arrangements. So if you have organic certification in Australia and you're exporting to China one,

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Collins Rex: what is the equivalent that you have to have in China to prove that your product is organic.

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Collins Rex: If you want to have a look at the my call requirements, or get the sense of the information There, that's the website that you see on your screen. It's my call, not agriculture, Gov. Dot au, and they really is a wealth of information that you can access through that site you do have to register for it, and you do have to meet certain requirements. You can't just go in and have a casual browse, but it is definitely worth while jumping through the hoops.

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Collins Rex: And of course, the whole purpose of doing all of this, and being aware of all the documentation and following all the due processes is that ultimately you need to get paid.

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Collins Rex: It's not an export order. It's not a sale until the money is in the bank, and you need to make sure that the money gets into the bank.

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Collins Rex: So let's look now at the main methods of payment that apply. If you are exporting and trading internationally. The first of those is prepayment or payment in advance, which is the one that you get. If you've won the payment lottery, one

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Collins Rex: open account opposite end of the scale, and then in between documentary collection and documentary letters of credit.

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Collins Rex: So when we look at the risks scale for you as the exporter the highest risk, the

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Collins Rex: and that is the risk of non-payment is open account, or giving your customer terms and the lowest risk for you is payment in advance, the exact opposite for your importing customer, and in between we have documentary collections and letters of credit.

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Collins Rex: So prepayment is absolutely the best method of payment for you as the seller or the exporter, because essentially you get the money, and then you ship the goods.

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Collins Rex: So you need to make sure that the payment is cleared before you ship the goods, and the importer essentially carries the finance for the period that it takes between you, receiving the money you sending the goods, and then actually receiving the goods one.

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Collins Rex: Now, needless to say, your importer is not likely to favor this method.

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Collins Rex: The risks for you as the export to here, while there's no credit risk,

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Collins Rex: and there is an exchange risk, because from the time you've committed to the sale until you receive the payment. The exchange rate may have changed, and the transfer risk while there is none, because you don't transfer any goods until you actually have cash in hand one hundred and fifty

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Collins Rex: now on the opposite end of the scale for you the exporter is open account

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Collins Rex: for open account. You essentially are going to give credit to terms to your customer. Those terms could be thirty days, sixty days, one hundred and eighty days. It just depends on what your commercial contract is with your customer. This method, of course, out and out favors the buyer because you provide the goods, and then you wait for payment which may never arrive

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Collins Rex: so before you go down the open account path you need to make sure of the credit worthiness of your customer, and you need to make sure that your customer has the right credentials. So how one hundred and fifty,

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Collins Rex: how good are they of a customer? You need to run some checks on them. You need to do credit checks on them. You need to make sure that you get terms of reference from them, et cetera.

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Collins Rex: If you send the goods, and then you wait for payment. Of course that's high risk, and you've got no control over whether you are paid at all. And if you are going down this path, particularly if you are shipping large quantities of goods, and you potentially stand to lose a lot of money. If you're not paid, you need to think about trade credit insurance.

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Collins Rex: So the credit risk here is large. The transfer risk is large, and the exchange risk is also large. If you're not being paid in Australian dollars because you cannot control the exchange rate.

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Collins Rex: The next payment method is documentary collection or site term, and we talked earlier on about the draft. This is essentially it.

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Collins Rex: So this way: you retain control of the goods until you're paid, or at least until you have the promise of payment that can be legally enforced

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Collins Rex: mit ctl, and it's a very common form of payment in international trade, and it's generally based on a bill of exchange. In this case you issue instructions to your banker as to how you want the transaction handled, and your commercial contract will include those same terms. One hundred and fifty.

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Collins Rex: Your customers bank is going to act as an agent for your bank,

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Collins Rex: so speak to your bank about all the products available that can minimize your risk, consult your trade, debt, insurer, and make sure that you also speak to your bank and your fx adviser.

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Collins Rex: Now the risks here you retain control of the goods until payment is received. So the credit risk is minimal. In this case you have already shipped the goods, but the goods are waiting to be collected. Once you have cited the draft, and your bank has said that the payment has been made one hundred.

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Collins Rex: Those goods are then released into the hands of your customers.

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Collins Rex: There is an exchange risk, as they always is, because there's always a bit of a lag between the time you issue the contract and the time you get the payment

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Collins Rex: ere

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Collins Rex: erez Agmoni, or you have to ship the goods back to Australia. And of course, if what you have shipped is fresh peaches. Chances are you're not going to be shipping them back to Australia because they won't be arriving here in any sort of saleable condition. One

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Collins Rex: and the final method of payment, which is also the most complicated one in many ways, is the documentary letter of credit. This is a conditional bank undertaking of payment. So in this case the credit bears a bank's name,

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Collins Rex: and therefore that bank accepts responsibility for payment.

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Collins Rex: There are a lot of documents that have to accompany the issuing of a documentary letter of credit, including the commercial invoice, a certificate of origin. If that's required insurance policies or the transport documentation that you need, et cetera fifty.

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Collins Rex: Now, in this case the risk is shared equally between the buyer and the seller, so it's a relatively comfortable position for both of you to be in uh, but it also does come with certain risks, and we'll look at those in a moment. This is what an Lc. Looks like, and you can see lots and lots of different line items that need to be included.

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Collins Rex: So these instruments, subject to bank and country risk if you're sending your goods to a country that is politically unstable is always the chance that the banks are going to default on the payment. One

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Collins Rex: erez Agmoni. Countries that are subject to political upheaval or sanctions or risk of war. You probably don't want to enter into letters of credit you might want to think about whether you want to sell into those countries at all one hundred and fifty.

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Collins Rex: You also really need to be aware of any political and economic vagaries in those countries, and make sure that you always work with a reputable Australian bank to make sure that they keep that transaction as secure as possible.

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Collins Rex: Erez agmoni credit risk. The credit worthiness of the buyer is transferred to that of the issuing bank. So if it's a stable country, the risk is really low for you from a credit risk perspective, one hundred and fifty

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Collins Rex: mit ctl. And so in this case your customer pays the bank. But the bank is going to issue the insurance essentially the guarantee that the payment will be made one hundred and fifty

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Collins Rex: exchange risk, same as in any other. There's always a lag, So there could be a payment risk there.

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Collins Rex: Transfer risk depends on the country and the setup in that country.

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Collins Rex: You have to take into account sovereign risk here, and very importantly, the biggest risk with documentary letters of credit is the documentation risk.

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Collins Rex: There is even a small difference between one document and another

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Collins Rex: ere,

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Collins Rex: and almost certainly will be held up. So make sure you get it right, and that you work with your bank to ensure that everything is as it should be.

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Collins Rex: And now there are a number of different parties to the letter of credit is the applicant or the opener. This is the bank that opens the letter of credit on behalf of the applicant, and this essentially is the customer one.

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Collins Rex: The issuing bank is the bank that opens the Lc. The beneficiary is the one in whose favor the Lc. Is issued. In this case that would be you as the exporter one,

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Collins Rex: and the advising bank is the bank through whom the Lc. Is advised to the beneficiary, and you can see the process there. So there a number of different steps in this process, and it's really important that all the documents are in place all the way along one hundred and fifty.

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Collins Rex: The important thing to note here is that you, as the exporter and your customer, as the importer do not control the handing over of either the money or the goods. That is all dealt with by the banks that's in the middle of this process

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Collins Rex: lots of different kinds of Lc. Uh. The most common being irrevocable revocable, so generally it'll be an irrevocable letter of credit can't be taken back once it's agreed to. But in some cases it can be so. You need to make sure that the correct terminology is in use. Then this site, credit and acceptance, revolving letters of credit, for example, and a whole raft of others. Just be aware that there are many, and that you need to be using the right terminology to apply

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Collins Rex: to the right letter of credit.

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Collins Rex: I've mentioned a number of times the potential for foreign exchange risk, and we're going to look now as the end of today's session at some foreign exchange basics.

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Collins Rex: Now, foreign exchange risk is a risk that faces all exporters. At some time or another

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Collins Rex: erez agmoni, because if you haven't taken possibilities of changes in exchange rate into consideration, it is going to affect your bottom line. So you do need a solid understanding of foreign exchange market fundamentals, because that will help you to understand your potential risk and to manage and mitigate it. One hundred and fifty

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Collins Rex: erez agmoni. But I cannot stress enough. You are not a foreign exchange dealer. Your business is growing. Things, producing things, baking things, making things that is your core business one.

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Collins Rex: So leave the foreign exchange complicated details to the experts.

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Collins Rex: But there are some steps for you to minimize your exchange, risk and step number one is to understand your exposure,

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Collins Rex: so understand the exchange rate at which you can sell or buy goods if you're buying in packaging, for example, and still remain profitable. And that is the key. You need to be making money in order to be in business. So understand what your baseline is, and that will be your budget right.

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Collins Rex: And also think about how much of your business relates to export. If you sell in currencies other than the Australian dollar, and there's a high proportion of your business that is done. So your exposure is that much higher one?

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Collins Rex: Where do you mostly do business? And what are the currencies in those countries, How stable are they compared to the Australian dollar?

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Collins Rex: How often do you make and receive payments? More payments you make, the more payments you receive, the more likely you are to be subject to the vagaries of exchange rate variations.

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Collins Rex: If you make and receive payments in a foreign currency, you might be able to take advantage of natural hedges. So let's say, for example, you export meat from Victoria to the United States,

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Collins Rex: but at the same time you import packaging from the United States. If you are selling to your United States customer in their currency in United States dollars

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Collins Rex: importing in Australian dollars. Maybe you want to consider doing that in the United States dollars as well that way. The two things can cancel each other out.

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Collins Rex: Of course your clients will always have a preference as to whether they want to be invoiced in their own currency or hours. So think about that, and as soon as you are invoicing in a foreign currency. The risk is going to be there.

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Collins Rex: So step two. Think of all the products that are available to you. The lots of different foreign exchange products that are available to help you manage your foreign exchange, risk, speak to your bank, or speak to a specialist provider of foreign exchange

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Collins Rex: step three. Have a plan

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Collins Rex: mit Ctl and don't Just go with this, like the proverbial bullet a gate, understand what your risk is, and understand the best way to manage that risk work with your bank, and have a proper plan in place, and then continuously step number four. Monitor that plan two hundred and fifty.

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Collins Rex: Your business is going to be growing. You're going to be selling more goods overseas, probably in lots of different currencies. So the plan that you put in place needs to be flexible, and make sure that you keep on top of it, and you keep on top of it with your bank

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Collins Rex: mit ctl. And now there is some key terminology that you need to be aware of. We don't need to go through this line by line. You will get the slides. Make sure, though, that you do understand what these mean, even if you are not running your own foreign exchange one,

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Collins Rex: If your bank says we want to fix a forward rate with you. Understand what that means. Understand as well what a foreign currency account is, and what it means for you and your business,

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Collins Rex: and the same thing applies to hedging and spot rights and everything else. So go through these at your leisure, and you'll get a pretty good understanding of the language that your foreign Exchange banker speaks because they do speak a completely different language one,

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Collins Rex: and that brings us to the end of today's session. Um, if you have any questions, please feel free to type them in the Q. A. Box. Um, I know we've covered a great deal of ground, but you welcome to throw any questions my way. Um! And if it's not related to today's or any other that you've thought of more than happy to take those. And also remember the pathways to export team is online as well. And i'm going to get all of you guys just to turn on your cameras as well,

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Collins Rex: so that our delegates can see you all, and if you have any questions for the team or myself,

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Collins Rex: so please feel free to type, those in the Q. And a box now. And as Jay also pointed out to the at the conclusion of today's session is also a short poll that we'd like you to complete, which just gives us a sense of where we're tracking in terms of the information that you're provided, and what it is that you would like to

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Collins Rex: mit Ctl. And uh for that future session that is also on the cards for us. So while you're thinking of whether or not You have any questions just a reminder that we have one more session to come in this Webinar series, and that is two weeks from today that session is going to be looking in some more detail at international risk, but it's also. And this is really important. Going to give you access to a number of experts that can help you on your export journey, one

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Collins Rex: mit ctl. And you're going to be hearing from some of the pathways. Team Um, you're going to be hearing from advisors in some of the countries that are our major trading partners. But you'd also going to find out about some of those other mechanisms that are there to assist you in your export journey, including finance, et cetera. So make sure that you register for that one. If you haven't already done so, because there'll be a wealth of information that will be coming your way. Two hundred and fifty.

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Collins Rex: Um, yes. Ah, you will be receiving copies of the Powerpoint. So Ah feel free to ah to check out with the the team as to when that's available, and it will be there, one

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Collins Rex: mit ctl and um fay. You've asked about the export license for meat producers. Yes, there is, and if you go to the deaf website you'll be able to get all the information you need there, and also the agriculture Victoria website. And if you drop me an email I will send you some information offline as well, because it is something that pertains to to a small percentage of you online today, so feel free to reach out. And I will send you some more information one hundred.

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Collins Rex: And as to where you can find all of those details also bear in mind that, depending on what it is you're exporting, you may also have to find a specific port through which to export that to certain markets. One

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Collins Rex: Um, if you wouldn't mind, you'll get my email address when you get your follow up for today's session, just send it to me there, if you don't mind

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Collins Rex: uh

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Collins Rex: glad you found it insightful, for if I be, do you get paid at? It depends depends on the contract so free on board, and you need to be a little bit careful about using terminologies like free on board, and a C. If one

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Collins Rex: erez agmoni, because they don't necessarily relate to all modes of transport. So if you're using air right, for example, then fob is completely the wrong term to use, because that pertains only to marine freight. So again, one hundred and fifty,

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Collins Rex: I think the best thing to do is for me to send you some details offline because it gets quite technical, and we'll probably be here talking about this for a good while to come. So send me an email. When you get to the follow up from today you'll have my email address, and i'll send you some more detailed information about the correct inco terms to use in the various uh concepts that you're going to be using

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Collins Rex: mit ctl. And is there an export license for spirits? Uh, bear in mind that alcohol is dealt with in a very specific way by importing countries. There are controls around this. So again, if you send me an email i'll send you all the details that apply specifically to spirits and what you can expect there, one hundred.

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Collins Rex: I think we've answered all the questions that we've had so far. If there are any others, Ip rights.

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Collins Rex: Wow! The question um, which didn't particularly to documentation. But of course, intellectual property rights are things that you need to be thinking about, particularly when it comes to protecting your trademark. Um! What I suggest you do, Pfizer, when it comes to uh things something like ip rights, because that's a whole session in and of itself.

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Collins Rex: When you complete that poll, and you have the opportunity to talk about what else you would like to know about and learn more about mentioned intellectual property, because that, as I say, is a whole section on its own, so more than happy to enter into a discussion with you about that. And maybe that's one for a future session,

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Collins Rex: and I think that's pretty much all the questions that we've had. So thank you. Everyone great to see questions, because it means you've uh You've been taking all of this in and um! It's always exciting when we get people

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Collins Rex: mit ctl and asking us questions. And I know I've said we'll take many of them offline, but that information can then also be made available to the larger group. Once the answers have been shared one hundred and fifty,

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Collins Rex: and I think that's all we have time for today. So thank you very much, everyone. You're more than welcome, Faye. Um! And uh good luck, with all your your export adventures, and researching all of those documentations and other bits and pieces that you need to be aware of before you go offshore

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Collins Rex: erez Agmoni. So thanks everyone, thanks to the pathways to export team great to have all of you on board today, and we look forward to the pleasure of your company on future sessions, which, of course, one hundred and fifty.

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Collins Rex: Our uh two weeks from today, when, as I say, it's risks so very important stuff, and all that information that can make your export journey just that a little bit easier. Thanks. Everyone. Have a great afternoon and catch you all in two weeks time.

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Collins Rex: Goodbye.

Speakers:

Jai Jackson-Jin, Policy Officer – Pathways to Export

Collins Rex, Trade Specialist and Series Facilitator

Yuri Schneider, Export Finance Australia

Will Dalton, Manager – Pathways to Export

George di Scala, Deputy Director for Trade – Global Victoria

Andrew Bester, Senior Trade Manager for New Zealand – Global Victoria

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Collins Rex: Good afternoon, Everyone and welcome to the final Webinar in our Agri-food export essentials uh seminar, and we certainly hope that the previous ones have helped you to unlock your export success, and today we're going to continue the journey. It's now my great pleasure to introduce you to Jay Jackson, and she's going to officially start today's session for us all. Yours. J:

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Jai Jackson: Thanks and good Good afternoon, everyone. And just in the office currently. So please to excuse any background noise.

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Jai Jackson: Um! I'd like to begin by acknowledging the traditional owners of country, and pay my respect to their oldest past, present, and emerging, and to the continuation of their cultural practices and connection to the living environment. I acknowledged any aboriginal, and Torres Strait Island to people who may be on the call today.

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Sovereignty was never seated, and it always was and always will be aboriginal land.

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Jai Jackson: Um, thank you all for attending the final session of our agri-food export essential series. My name is Joe Jackson, Jin and I'm. A policy officer at the Pathways team here at Agvic.

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Jai Jackson: We'll be here throughout the session and welcome your questions, using the question and answer function

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Jai Jackson: at the conclusion of today's session. We'll be sending a link to a quick survey through the chat function, and we'd really appreciate your feedback. Um. The survey is also an opportunity for you to express your interest in an in person workshop which we can hold at the conclusion of this Webinar series. So we look forward to staying connected with you and supporting you on your pathway to export,

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Jai Jackson: and i'll now hand back to Collins for the remainder of this exciting session. Thanks all

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Collins Rex: mit Ctl. And thanks very much, Jay. And yes, as Jay has mentioned. Uh, there will be an email link at the end of today's session. So please make sure you complete that. And it's particularly important for us to know what it is. You would like to know more about any further information, so that we can work that into a face-to-face session as well two hundred and fifty.

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Collins Rex: As I mentioned, I'm Collins, Rex and I'll be your presenter today, and I, too, would like to start today by acknowledging the traditional custodians of the lands on which we all meet, and for me this is the land of the were injury people of the coolant nation, and I pay my respects to elders, past, present, and emerging, and also extend that respect to any aboriginal and Torres Strait islanders, peoples who may be joining us on Today's Webinar.

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Collins Rex: So what is Today's Webinar? What we've got quite a lot of ground to cover today. We're going to start all today's piece by looking at export risk and some of those mitigation strategies. And of course, along with risk

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Collins Rex: comes opportunity and part of the opportunity, and also part of the risk mitigation that you have available to you is the support that is available to exporters in the State of Victoria, but also across Australia. So we'll be looking at some of those all important support mechanisms we're going to be hearing from the agriculture, Victoria's pathways to export team and from Global Victoria. And finally, we'll be taking a quick look at what's available

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Collins Rex: Mit Ctl. And to you through ours trade and through Ip. Australia. Very important today, though, that you make the most of the opportunity to ask any questions that you might have not just about today's session, but of any of the other areas that we've covered over the course of these webinars. And of course we've been doing this for about eight weeks now. So any questions that you might have any general questions or specific ones, and between myself and the team that will be online one hundred and fifty.

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Collins Rex: I'm: Sure, we'll be able to find the answers for you. So uh, let's get straight into it. Shall we? And let's start off by looking at the all important component of export risk,

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Collins Rex: export risk management is incredibly important. When you are embarking on your export journey you cannot ignore the fact that there is risk incumbent in export, just as there is in any business activity

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Collins Rex: mit ctl, and there's some key ports points for you to take into consideration when you're thinking about how to manage that risk. The first thing, of course, is that you need to identify all potential risks. One hundred and fifty.

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Collins Rex: You need to rank each risk according to the likelihood of its occurrence and the potential severity of that risk. And of course that will be different for every single organization one.

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Collins Rex: No business is going to have exactly the same risk in the same way. So for yourself, what is the likelihood of a problem occurring. And how are you, then going to manage that in terms of your own business?

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Collins Rex: Also evaluate all the strategies that you have in place to manage the risk. And again, different strategies for different risks, different strategies for different businesses and different phases of business.

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Collins Rex: And once you've got a strategy in place. You can't just leave it there. You also need to monitor your risk over time, and as you monitor that risk, you also need to adapt your strategies because your circumstances will change too, one

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Collins Rex: mit

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Collins Rex: one. You might also start off by exporting relatively small quantities of a particular commodity. But as time goes by you increase your quantity, and that could have problems with quality control. For example, as you move through one hundred and fifty,

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Collins Rex: so let's look now at some of those major export risks, and the first one that we concentrate on is political risk.

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Collins Rex: One exporter does face significant political risk, and these risks differ substantially from country to country, and of course some markets are a lot riskier than others when it comes to the political situation, one hundred and fifty.

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Collins Rex: And when we're talking about political risk, we're talking about things like changes in government, or indeed even elections in markets that might change the way in which certain things happen.

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Collins Rex: We might be talking about sanctions regimes. So let's say, for example, you were an exporter of premium spirits into Russia six months ago

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Collins Rex: that might not have been a major drama then. But of course it is a problem now, and that is a problem that occurred relatively quickly,

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Collins Rex: mit ctl. And and this is the sort of thing that we have to take into account with risk. When it comes to the political aspects. It could also happen really quickly. It can happen in a way that is not always predictable. Civil unrest might occur almost overnight in a country one hundred and fifty

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Collins Rex: in Pakistan just recently. Of course, we saw the attempted assassination of Imran Khan. That means that chings have changed rapidly in the way. We assess that country's risk profile

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Collins Rex: as those risks occur, and as a country's risk, profile changes or deteriorates. If you're operating in that market, you could face a range of problem, you might not be able to expatriate funds. For example, Banks might have runs on them, and any drafts or letters of credit that you might have in place might not be functional any longer.

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Collins Rex: Customers might not be able to take receipt of orders and any number of other issues that might arise.

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Collins Rex: Now there are ways to mitigate political risk, and

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Collins Rex: Erez agmoni. Of course it is difficult to predict. So one of the main ways of mitigating this is by constantly monitoring the political situation in the country in which you operate, and it really doesn't matter whether it's a relatively stable country or it's one that's relatively unstable. You still need to keep a handle on what is occurring there. One hundred,

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Collins Rex: if you do monitor things, and you do have a process in place, for when things go wrong. It's relatively easy for you to take steps to limit your financial exposure, so you can, for example, reduce credit limits for your customers in that country as soon as things appear to have changed negatively.

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Collins Rex: You can also get insurance policies, and this includes credit insurance. But you can also get policies that will protect you against political risk, and if you are operating in relatively unstable markets, that is certainly something that you have to consider.

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Collins Rex: The next risk is legal risk. And here we're talking about laws, regulations, business practices, and the like. And of course these vary dramatically from one market to another. One

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Collins Rex: number of issues can occur when it comes to legal issues

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Collins Rex: mit ctl and customs and all the regulations around entering a country and crossing borders could be a problem. And this is something which is particularly marked if you are in the perishable product world, because any customs delays, of course, will negatively impact the quality of your goods, and might, in fact, make them unsalable when they arrive in a country. And again, these are some of the risks that can occur relatively speedily. Two hundred and fifty.

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Collins Rex: So we recently had the issue, of course, of Bali going into China, where almost overnight,

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Collins Rex: Erez Agmoni dramatic duty increases, occurred, making that commodity almost impossible to export from Australia into China. We're also talking about legal contracts, so your contract of sale, which may or may not be valid in certain countries, or certain clauses that are perfectly acceptable in Australia might not be acceptable in another country. We're talking about currency risk, for example, and your ability to protect your intellectual property rights, one hundred and fifty

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Collins Rex: there, of course, any number of other laws and regulations, particularly as they relate to quotas, et cetera, and you need to be across all of that before you enter a certain market,

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Collins Rex: and you need to have mitigation strategies in place. Now, one of the best ways to do this is to hire legal advisors in the country into which you are exporting, or in Australia that have great familiarity with that country, and have an innate knowledge of the local laws and regulations. One hundred and fifty

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Collins Rex: erez agmoni. You don't want to get involved in legal disputes, very expensive. They take time, and they really are not a satisfactory way of resolving anything. So, having proper legal advice is a really good way when it comes to dealing with legal risk one.

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Collins Rex: The next risk is credit and financial risk

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Collins Rex: for any business trading at all.

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Collins Rex: Non-payment or default is

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Collins Rex: two significant risk. Of course, that risk is exponentially larger. If you are dealing with a number of different customers in a number of different locations, particularly since you cannot just go knocking on someone's door. If they are in a whole other country, one

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Collins Rex: so export credit risk is amongst the most significant financial risks that a company can face.

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Collins Rex: It's very difficult to get a delinquent customer to pay it the best of times, but it is even more so when that customer is in another country.

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Collins Rex: It's also problematic to even try to assess the credit worthiness of an international customer. Not all customers are listed, not all countries keep detailed information, and if you are going to invest in lists from Dun and Bradstreet, for example, it's expensive, and you might not be able to afford that.

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Collins Rex: Of course there are ways to mitigate that risk, and many customers rely on things like letters of credit. And we talked about those last time around. But even they can be problematic, because some customers not might not be willing to go down that route, and you might lose business.

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Collins Rex: Another major risk when it comes to financial issues is not pricing correctly it

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Collins Rex: ere.

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Collins Rex: So. How do you mitigate these risks? Well, again, get yourself some decent legal advice, and of course there are credit agencies who will also help you to assess the credit worthiness of a customer. One hundred and fifty

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Collins Rex: can be expensive, and it might not be available. So enlist the support of government agencies in country and bilateral business chambers can be of great use here as well,

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Collins Rex: and also consider export credit insurance. If you are extending terms to customers, particularly if they are large orders, orders that you cannot afford not to be paid for. Then you do want to consider credit insurance, because credit insurance is going to help you one

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Collins Rex: recoup, at least some of the losses,

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Collins Rex: and of course you need to learn to price accurately. You have to take into account all your import costs, and then you need to have a proper addition of a margin to guarantee the sustainability of your business.

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Collins Rex: Any export business faces risk when it comes to transport and logistics.

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Collins Rex: That export sale is really just the start of a very long and very secure process. You need to get the goods safely into the hands of your customer

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Collins Rex: mit Ctl. And in the state that they expect to receive it. If your customers don't receive the goods in the right state. They simply are not going to pay you for them, and this is particularly marked in the agri-food sector, where there's a great deal that can go wrong if goods are perishable and they are not transported in the right way. Two hundred and fifty.

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Collins Rex: If you need refrigeration, you need to be careful of being exposed to excess of heat, or indeed, excess of cold,

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Collins Rex: mit ctl, and frozen goods are not fresh goods, so bear that in mind. Of course, if there's an expiration date and there are delays at the port again, you could run into all manner of problems. One,

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Collins Rex: if you have fragile goods, and if you're a manufacturer and a distillation distiller, for example, of spirits, or you make wine, things are in breakable bottles, and you have to make sure that they are sufficiently packed. One hundred and fifty.

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Collins Rex: Something goes wrong. Chances are the buyer is going to reject the shipment altogether.

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Collins Rex: So How do you mitigate? Well, you mitigate by making sure that there is sufficient quality control, and that you have the right tracking procedures throughout the process, and use a specialist, logistics provider,

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Collins Rex: and you, somebody who understands your industry and the potential problems of your industry, and is able to mitigate those risks before they even occur, and of course you need to get adequate insurance

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Collins Rex: mit ctl. And we talked about marine insurance last time around a marine insurance obviously applicable as well to air cargo. Make sure that you have insurance in place to compensate for any losses, and also make sure that you use the appropriate inco term one

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Collins Rex: to make sure that if you are not responsible for the transportation of those goods that you do not carry the risk that you use an inco term that indicates that your customer is responsible for the risk of carriage, and that they carry the costs of insurance.

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Collins Rex: Now you also need to take into account both the first mile and the last mile, and just some of the things that can go wrong if you look at the cargo ship on the top left of your screen containers fall off ships all the time.

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Collins Rex: It might seem like something which can't occur, but it actually does occur far more regularly than one would imagine. It's probably about ten percent of all containers end up overboard one hundred and fifty.

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Collins Rex: And of course, when we look at the uh the cycle on the right-hand side. That is the last mile that you have to take into account the reality of the last mile in many markets. So think about what happens to your beautiful fresh strawberries, if they are being transported in that way, and of course a cargo to all manner of things can occur and not occur, and that happens to be a fresh produce shipment that is going to Afghanistan one hundred and fifty

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that particular aircraft,

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Collins Rex: and that brings us to quality. Once you've shipped the goods. Customer might not be happy with the quality if they're not happy with the quality, chances are they are not going to pay you.

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Collins Rex: Um. There's a question about uh shipping. We'll take that one at the end, because it's a There's actually a very interesting conundrum that occurs, Kelly, if uh cargo goes overboard in that way, so i'll address that one at the end.

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Collins Rex: Your buyer might also want to gain leverage and negotiate a discount by claiming that the goods aren't of the quality that they were expecting. So how do you mitigate against that? Well, one one

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Collins Rex: mit ctl and hire an independent third party to inspect the goods before they shipped. So if you've had an issue with a customer, make sure that you get an independent third party to verify and make sure that the customer doesn't raise the same issue further down the track. One hundred and fifty

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Collins Rex: Also make sure that your own quality. Assurance processes are robust, and that they well documented, and that you have processes that are repeatable across the board. Now, if you have has a certification. Chances are you've already got this because you need to, in order to be certified to make sure that you actually stay on top of it all the time

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Collins Rex: and understand consumer laws in the importing country, because you need to meet all the regulations, and you can't meet them if you don't understand what they are, and of course get yourself adequate liability, insurance.

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Collins Rex: Now, language and culture is also an interesting one. Doing business with importers and exporters in any country is going to raise issues, and we have talked about this in some detail. So we don't need to spend an enormous amount of time here. But just understand that just because you do it in Australia, because it works in Australia Doesn't mean it is going to work anywhere else, and you need to be across that. So do proper market research, get people on staff who speak the local language, or have experience

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Collins Rex: of living in a particular culture or a region

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Collins Rex: ere

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Collins Rex: now. If we look at the images there, you can see some of the failures that have occurred. Um! On the left hand side, snow, white, and apples. Probably not the best combination, considering that apples poison snow white, in the first place, and if we look at the failure of unbreakable wine glasses where You've got a child. You certainly don't want to do that sort of thing. But, on the other hand, consider things like the gift giving cultures that occur in many markets. So this is a way for you to showcase your Pre.

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Collins Rex: It's it's the same.

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Collins Rex: Then the final risk I want to concentrate on is that of technology and cyber security

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Collins Rex: mit ctl. And most companies are really graded introducing new technologies, and then they don't maintain them adequately or get rid of them when they've reached their cell by date. So make sure that this is not a problem that occurs with you one hundred and fifty.

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Collins Rex: There are any number of challenges that occur when it comes to technology and staying on top of it. And of course there's Cyber security Gartner tells us that only sixty-eight percent of Smes have active cyber security policies, despite this being one of the major Channel challenges that we currently face.

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Collins Rex: Sorry just got it frozen. My threat.

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Collins Rex: So make sure that you stay on top of these issues. Get your hardware up to the task, replace it when it's necessary, particularly if you're a producer,

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Collins Rex: update your software and install all security patches as you need to and get expert advice. And when it comes to cyber security you need to do the right thing.

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Collins Rex: Consider monitoring tools, encryption tools, web, vulnerabilities, scanning tools, packet sniffers,

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Collins Rex: of course, have antivirus software and firewalls, But also consider having managed detection services and penetration testing and make sure your staff is cyber ready, and there are any number of resources that we can share with you to help you along those lines,

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Collins Rex: and then there's insurance. Make sure that you are adequately insured People don't want insurance because they say it's expensive. Well, how expensive is it to deal with the loss.

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Collins Rex: The export credit insurance will provide protection against payment, default, and also against unpaid invoices. Now there are rules and regulations that govern this, but it can certainly help one hundred and fifty

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Collins Rex: mit ctl, and there's export risk insurance that can protect against loss that is caused by political events and turmoil, transportation and logistics coverage, including that all important marine insurance and insurance against data and file ransom three.

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Collins Rex: This is something that you do need to consider. If you store large amounts of sensitive customer or personal data.

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Collins Rex: Now, good way for you to assist the risk that is in every single market that you're going to be approaching is to do a pistol analysis, and that quite simply stands for political, economic, sociological, technological, legal, and environmental. And if you do a proper pistol analysis of every market that you're considering approaching, you will find that you will adequately understand the risks involved in each one of those markets,

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Collins Rex: and then you can put in place a proper risk. Mitigation, strategy for each one of the letters in the acronym. Now we've covered all of these in the risk that we've talked about. But this is a really good way for you to assess the risk and make sure that you are on top of it. One

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Collins Rex: so risk is important. Oh, my goodness, we've just done

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Collins Rex: so. Something weird risk is important. But of course there are all manner of other things that are there to assist you in addition to those risk mitigation strategies that we've talked about. And that brings us to the next part of today's session

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Collins Rex: mit ctl. And because you are not alone, there is support out there. That support is marked for exporters, and you really do need to make the best possible use of all of it, and we're going to start today by introducing you to export finance. Australia and I'd like to introduce you to Yuri Schneider, who's going to talk to you a little bit today about what they can do for you, and how that works one hundred and fifty.

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Collins Rex: So, Yuri, i'll get you to join us. And uh, just tell me when you want me to change your slides, and we'll move through your presentation.

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Yuri Schneider: Thank you very much, Collins, and most of those risks you uh outlined. Uh well, I can almost see my risk. And uh credit teams in my year, right now, going all the things we need to cover when we look at an opportunity. So um as I say on my i'm zerry Schneider from export Finance, Australia.

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Yuri Schneider: So i'll let um you move through to the next slide.

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Yuri Schneider: I'm just gonna quickly cover who we are, Our mandate, our solutions, and some about six six success stories, so we can keep moving.

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Yuri Schneider: Um! So who who is exported to this right? You might have come across to see now. Well, I still our official name. Um, is it is is ethic uh export finance insurance corporation.

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Yuri Schneider: We're governed by active Parliament or a corporate commonwealth entity. What does that mean? We're a bit like the Nbn. Australia Post. We have an independent board. We're govern by active Parliament, and my poor Ceo has the front percent Estimates committee every quarter to get grilled about all the things we do in time to

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Yuri Schneider: um. So in in two parts where I uh, you know, a small organization about one hundred and twenty people would basically uh to in to put it in a um great things. We're export bank.

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Yuri Schneider: So we've got two businesses. Um, one that targets smas which I work in, and another one is project and structured finance, project and structure of clients, and normally the ones you might come across them in big deals. They help to big institutional infrastructure projects. Settings are critical minerals uh large infrastructure project projects and hundreds of millions of dollars.

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Yuri Schneider: Um! Whereas I work in our Sm. A team, and we basically support businesses anywhere who turn over two hundred and fifty thousand dollars a year to a couple of hundred million dollars to another year,

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Yuri Schneider: and so we support, you know, small businesses, families uh large corporate uh large family businesses, public with Mps and everything in between.

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Yuri Schneider: Uh. So you know we've got a couple of capabilities, you know the government lots to focus on things on the um infrastructure in the Pacific region.

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Yuri Schneider: They also lock us to help things in areas of defense export which doesn't really attribute to the audience today. Um, and things like critical minerals. Um. But we're generally here as part of providing the gap between what the um the banks will provide you in the market, and what the you need to um to export,

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Yuri Schneider: and the realities as uh Collins was outlining because some of those re offshore in terms of uh counterparty risks of customers you sell into markets and country risk political risks

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Yuri Schneider: because of those some of those markets the banks um struggle to understand or get comfortable. We're generally filling that gap that need um for for exporters. If you want to move to the next slide, Collins.

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Yuri Schneider: So couple of things. Um, we work on a commercial basis. So what does that mean? We charge interest and face. We raise our own money in the market. So there's it's not government money. We're playing with

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Yuri Schneider: um, so um! They don't like it if we lose money because it means they get a less dividend each year. So we do work on a commercial basis. But we do stuff. We do do um transactions a little bit more risk than say the banks would do to fill that market gap. Need um.

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Yuri Schneider: One of the key things Collins is talking about is, you know, capability to deliver, to actually make sure that you can actually um, you know, complete the export. So all those risks around, you know, quality control Um, making sure you're gonna get paid so often. We we look at a customer who's maybe done the initial

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Yuri Schneider: um order that they've done It completed a couple of smaller orders, and now they're starting up to a bigger order where they they need that financing support.

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Yuri Schneider: Um, We're very much focusing on the Australian benefits. So um! Clearly, what does that mean? How many jobs are you creating in Australia? Is it, you know, Strain growing products? Um, you know, This is not really the case in terms of agriculture, because it pretty much Everything's coming out of the ground in Australia, and it's been being helped cultivated here.

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Yuri Schneider: So that's that's all. Automatically, often an Australian benefit. Um! And some of the guidelines also is the um environmental and social guidelines.

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Yuri Schneider: So as a government organization. We want to make sure that we're supporting transactions

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Yuri Schneider: that i'm not gonna end up on the front page of the paper and and and and lend to counterparties who maybe have um. You know what's beside the dodgy in overseas, so we will. We do a lot of technical um risk management

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Yuri Schneider: um around um transactions. This is, allows us to do um a lot of the the transactions we do compared to what the banks can do, because we've got some of the uh background checks and um systems and processes to to manage that. Um. So in terms of what type of facilities

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Yuri Schneider: effectively a small amount is twenty grand, and we've done a couple of billion dollar deal. So you know, we we've got a quite a broad range and types of customs We can help and types of transactions we can support. Um. Our mandate is around fishing. Sm. Is but how many exports we support each year. So

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Yuri Schneider: one thing I want to leave is that one's too small? Um, and no one's, you know, too big for us. Um, we help all sorts of businesses, and they're all valuable. So we're really assist on how many people we support each year.

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Yuri Schneider: Um! Whilst it's clear that you know it, banks unable to prove provide finance um more of the not if you're talking to us, it's probably because the bank said no, and you like, Where do I go? How do I support my transaction.

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Yuri Schneider: Um, and that that's generally when we're getting involved, and more often not, we're a complementary finance. It's a bank. So we often working hand in hand with them, they often referring as customs they want to retain, but because if they were skeptical, I can't assist in certain types of transactions. You can move to the next slide, please.

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Yuri Schneider: So how do How do we? How do we see so effectively? Probably in this case, if you're exporting, and you know we generally tend to do more processing of agriculture products. Um, So we're not probably doing uh, you know, the

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Yuri Schneider: outside the the growing piece, which generally, when someone's processing

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Yuri Schneider: um in a vertically integrated business. So often it's like the working capital from from that grow up to the to the exporter um, or it's it's one of the pace where there's valuated prices that need to be financed. So we're generally doing against purchase orders on a working capital perspective, or sometimes supplier invoices.

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Yuri Schneider: Um can be the case we're doing. We often do export supply chain. So um quite a number of businesses we work are in the meat industry,

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Yuri Schneider: so sometimes you'll have a um, a direct abattoir who goes through a meat exporter because they've got the relationships. So sometimes with, uh financing the abattoir on an export supply chain price um basis, or actually as a direct exporter, or alternatively, we might be financing the the the main exporter.

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Yuri Schneider: Um. So you know, in terms of some of the businesses. This might not be appropriate to to the custom, you know the to to the the audience today, but you know we do a lot of supply stuff for e-commerce businesses.

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Yuri Schneider: Um, you know, if you're looking to establish uh you know a sales platform, it's like, you know. You're trying to expand to the Us. You need to have a sales office. You need to have someone on the ground. You might need to have a distribution site. We can support with that. If you're trying to expand your process, you know. Packaging um we can do onshore direct lending to help the Capex in that regard. Um. Obviously, international tourism is not um uh applicable, and often we can help finance foreign buyers. That's more and more

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infrastructure top stuff.

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Yuri Schneider: If you can move on to the next slide.

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Yuri Schneider: So effectively we do four things. Um, probably not all parking it to the audience, but effectively we do loans. And then what are they? Basically A term line? Um for capex or onshore, or offshore direct investment?

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Yuri Schneider: Um, we do a working capital facility which operates a bit like a trade. Finance facility to finance purchase orders generally over one eighty, a one hundred and eighty day. Um cycle.

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Yuri Schneider: Um! Probably the one. Here is a bond. What is that? That's an international bank guarantee. So sometimes people want an advanced payment on a contract. If you've got a uh, maybe you have a contract of supply where you've need to provide

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Yuri Schneider: um produce over a number of um different installments, and you want to do a deposit that they might want to bond back to make certainty of supply that you're not going to run away with them. Um deposit

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Yuri Schneider: uh guarantees is generally where sometimes, especially the commodity traders. So businesses like it's often we see in uh in wool uh some of the grain businesses. They got high volume um transactions, and so we're not, probably, for uh, to facilitate. Yeah, we're only one hundred and twenty people.

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Yuri Schneider: We can't more. We facilitate on daily basis. So sometimes we provide guarantees to your lender to support facilities, so you can um operate those high volume businesses

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Yuri Schneider: uh corporate finance. Well, effectively, we do all sorts of type of financing, so they might be acqu acquisitions. Um, you know, Project finance. You name it um any type of uh fine funding where there's a global transaction. Um, especially, you know export um. We can assist

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Yuri Schneider: um for a move to the next slide. So um some success stories. So i'm probably going to talk to a couple of these very briefly, and you might say this uh agricultural products at the next stage. Um! But you know this is a clear case of like, you know we had a facility during Covid, where we helped um small businesses, and so this is an example of a um train, all getting honey. They'll had a contract a large contract in Germany with I need support in and above what they needed,

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Yuri Schneider: and We' to help them with that um, and that's where we probably got comfortable with the country risks. So obviously Germany is a first world country, but the end by doing the background to know. Hey, these guys are reputable. They're going to be out on it. We also probably do that. Can the customer deliver Is the the quality, is it, you know, going to be out delivered in time

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Yuri Schneider: and and and managing those risks, and and being able to support the customer and generally, when we're doing this with our property security. Um, we're We're basically financing the transaction. So it This is where we can help. Uh, you know, customers where you know some some of the banks Can't you want to switch the next one, please?

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Yuri Schneider: Um. So now it's just dairy. I'm here in victoria. We do a lot of um dairy and and me. Um, so they're They're a business. Who um was a spun out of the Mondays uh they, um, you know, underlies a quite a lot of uh processing facilities. They were at um the aggregation of that

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Yuri Schneider: um, and we came in provide working capital facilities. So they do a lot of exports into China, Japan, south, East Asia. Um. They've had some stories where, you know. If there's one batch of like four

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Yuri Schneider: um uh you know, for containers um ones, but one's been um, you know. Uh You've got that threat of like, hey? You've got it all deep uh acceptable. Otherwise that what they'll exclude the whole batch. Um, and they've been some issues with the previous owner. So um, that's where that quality controls really important, because you can cause some issues, and because it's a first product. If it's sitting on the walls for too long, you can cause a lot of risks. So quality control is really important. And so they've been out

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Yuri Schneider: that around as the new owners of that business um, and to really deliver some good opportunities. So we did a working capital facility for them. Um, and they're growing really well, you can move on to the next one.

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Yuri Schneider: So this is a business out of wi which was a um blueberry business, and effectively. I just need to be packaging machines to help production facility

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Yuri Schneider: um in this. So every advice business, so that were like they had a a growing business here in Australia, and they also had stuff offshore. So we're all to help with some of the um the opportunities overseas. So that's a a a direct line for really, for from an asset finance perspective, because it was offshore Um,

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Yuri Schneider: the the you know that when they products landed downloading process from Australia. It was. Uh, you know It's quite difficult to lend into overseas markets for a lot of lenders, because they have not control or

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Yuri Schneider: all. I can't put their charge over the pro over the asset. Um, and we're able to do that sort of stuff. Um, probably in terms of the additional ones. We do do a lot of uh. There's a lot of resources on our website. So things, if you want to understand country risks. Um! Some of that case studies. There's some, you know. General Export. Um,

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Yuri Schneider: you know um information There, you just looking for some general stuff. The big thing country risk is probably good to understand, because um certain markets what our country is. Do take Intel, you know political risks. Um, we do. They need to markets where you know

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Yuri Schneider: there's some markets where they will go.

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Yuri Schneider: Why are you going there? But there are parts of it where it's quite It's quite viable, and and can be well, if you've got really good march, and it's worth um. It's worth um, you know, pursuing. But you need to understand and do the homework as as as is outlining.

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Yuri Schneider: Um, Probably just the other thing is, we do a lot of abattoirs, and may export a savvy in that industry quite help. There's two of us uh gentlemen who cover Victoria Tasmania. It's my colleague, Simon and myself. Um, we're basically both career bankers. So we're, You know, I've been looking after customers in all segments for a long, long time. And

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Yuri Schneider: um! And so you know it. Really, it's real pleasure to work in this space and help customers grow and and break glass as they're growing through their export. Um business.

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Yuri Schneider: Sorry. Thank you.

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Collins Rex: Thanks very much. You know. I'm conscious of the fact that you you have to get off. But if you do have time

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Collins Rex: wonderful, then I'm going to to to to pose the two questions specifically for you now, because we might get them at the end. Um! Two questions. One is, what is the security that you require, and the other what is the eligibility of a start up with less than two hundred and fifty thousand dollars Annual turnover.

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Yuri Schneider: Okay. So we don't do startups. Um: We generally need to be trading for a couple of years, and

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Yuri Schneider: we'll send me on to that if you see if you actually looked at the customers were starting to help at the early stage. It tends to be um more over half a million dollars to seven fifty is the early stage amounts um

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Yuri Schneider: a. And and to be honest, where, because of the type of transactions we're doing. We are looking under the hood of the car pretty detailed, no matter how much the amount. So um,

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Yuri Schneider: you know, when the generally not taking physical security. So because it's certainly. If we do take security, It's certainly a charge of the company um downstream guarantees from call the back. Then, you know, if this corporate inquis and directors guarantee. So that's generally a security. There are times where we do take physical security.

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Yuri Schneider: Um, and that's sometimes where you know it's.

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Yuri Schneider: But you know specific transactions. It might be. Um it. It just needs to be taken, so that depends on the nature of the business. So we're more a scale up business. So you generally, when we sign a support, businesses It's that that jump from

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Yuri Schneider: You're in the year where you're gonna jump from from from lost making to profitability and and saying that that scale up,

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Yuri Schneider: or you've got a very clear transaction that that's got a clear like, you know um

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Yuri Schneider: clear support of that of that uptake from from loss making. So that big contracts that that that hunting uh make a you know It's like hypothetically. They were maybe lost making, but they brought this contract. It's better than if they supply they going to be a profitable business based on their forecasting.

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Yuri Schneider: That's correct, And the key thing we look at is, we look at cash, flow. Forecast on a monthly basis is how we assess businesses predominantly. So that's that. That's the the key difference. So if you're not a sophisticated to be able to provide that

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Yuri Schneider: that's why small businesses probably not as adapt to providing that financial information.

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Yuri Schneider: So that's that's the the Ch. The the challenge in the startup price

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Collins Rex: mit ctl and great thanks Thanks very much, Sherri, and thanks very much for your input. Um, Very interesting stuff. And we'll take any other questions for Yuri at the end of today's session, along with all the others one,

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Collins Rex: and that brings us to the team that has put together this entire series, and that is there to assist you, one on one with any information and advice you might need, and I'm delighted to introduce you to the members of the team as we move through uh the next uh constant section of today's presentation, and I'm going to start off by introducing you to Will Dalton, who's the manager of the Pathways to export program. All yours will

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Will Dalton: Thank you, Collins, and great to see so many people uh online for this uh final session. And

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Will Dalton: um. So there's a a a great amount of um support that is available through the Victorian Government. Um, and the the the two main ones. We want to talk about. Um uh the the program that I manage pathways to export, which uh sits within agriculture, Victoria, and is targeted at

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Will Dalton: nation emerging small-scale industries and all about it, developing export capability so

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Will Dalton: a good example of what we mean by that is this Webinar, and we've had to previous Webinars and to plan on

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Will Dalton: running future webinars as well. Um. So, looking to really build capability um, and a system particularly small businesses um with on on their pathway to to export. But they look. Having said that we also

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Will Dalton: work with um with companies that are looking to expand and diversify into new markets, and

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Will Dalton: and we would very closely with with that colleagues in England and Victoria, who uh the the lead on on trade facilitation um, and run a a magnificent um trade mission program for export ready companies um to various parts of the world.

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Will Dalton: And uh you'll you'll hear more from um, George uh into course about about the offering. But i'll just focus in on on pathways for the moment. Thanks, um, Collins, and just

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Will Dalton: let you know a little bit about what we're doing. So at the moment. It's very much about um trying to grow awareness of our program and encouraging um interaction with with companies. Um, as we sort of are relatively new. Um and um

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Will Dalton: again, a building capability, which is what I I mentioned earlier, and then, ultimately, you know, supporting practice change. That That sort of the gold standard for us is is helping companies actually export it into into markets. So um that sort of what we're doing, and and how we're doing it is um

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Will Dalton: we uh we're gathering market intelligence. Um we're communicating that we're developing tools and and support services. Good example of that is is this Webinar series which will be made available on our export. Hub: um,

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Will Dalton: and we're just generally uh engaging in providing one on one bespoke services. Um! Almost like a like a handholding top service for individual companies. Should they should they need it.

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Will Dalton: So we have the an exports um hub on a website under the exports tab, which is a dedicated resource, and you'll find lots of that useful information. Um, there's links to the export readiness quiz. There's information on upcoming events, webinar recordings, et cetera.

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Will Dalton: Um! We put out a newsletter every month, and um encourage everyone to sign up to that newsletter, and they can do that through the uh

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Will Dalton: through the hub, or we can put a link in it at a later stage uh into the chat. And um, I've mentioned our workshops and webinars. We We held a very successful one with those trade uh a few months ago now on their digital services platform, which was attended

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Will Dalton: by about a a dozen um businesses. And um! I got to learn learn a lot about um some of the the free services that I was trade um provide

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Will Dalton: um, and lastly, the business engagement. So we attend trade shows there's a picture there. May it? Fine food which was recently in Melbourne, but we've also had the team um attend shape pension in Hamilton, the Melbourne show and and engage with businesses directly there. Um

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Will Dalton: and um. Jay's a a member of of of the team who did the Intro. But we also um have other other team members as as well in in Shanghai is not here today.

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Will Dalton: Um, Indiana

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Will Dalton: next slide, please. Collins. Um: Yeah. So I think i'll hand over to um to George at this point to to take us through in a bit more detail the the offerings of um of of global victoria

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Collins Rex: mit ctl. And Thanks very much Will, and any questions that you have for will about the pathways to export program, or indeed any of the initiatives that he's mentioned. Please feel free to type them in the Q. A. Box. And uh delighted. Now to introduce you to George Descola, who's a deputy director of trade at Global Victoria and George is going to talk to you a little bit about some of the services and the facilities available through global Victoria. All yours, Georgian, Welcome two hundred and fifty.

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George Discala: Collins. Thank you very much. Wonderful to see you again. Um! Well, thank you very much for the introduction. Um, before I get started. Um just like to re to write the the messaging from Yuri in particular about uh export finance, Australia. Great organization, um, and one that you'd need to be involved in through the journey of your um of of the export at the export journey that you undertake It's just gonna be critical. It's not.

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George Discala: I need it now, but down the track you never know. As you grow as you expand it's it's it's quite valuable um in terms of global victoria, as I will alluded to before um we the the trade facilitation arm of the Victorian Government. We have, uh twenty-three offices set up around the world. Those offices have been set up to support companies to engage internationally. We have five across Southeast Asia and five in China reliance. So you can see that our focus is very much

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George Discala: uh it's very strongly based on the Asia pack region.

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George Discala: Um, we we do have um facilitators in those offices that are set up specifically to support exporters, not only during trade shows, but before and after, and they are going to be a critical part for your international engagement. Um. And i'm sure we'll has referred to um the staff that as we have in those offices as well. Um global victoria also organize both outbound and inbound delegations.

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George Discala: Um food and Hotel Singapore was one that we recently held in. Uh, we hosted in Singapore. We we took, I think, in total around seventy companies, about fifty of those exhibited on the pavilion itself. Um. But we also supported companies that we're attending that show just to understand and learn about the market and standard market, make and see competitors and get a better understanding of what their strategy would be into that market. We're about to take a delegation over to food and Hotel

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George Discala: Vietnam, which is taking place in in early December. We've also got gold food that's happening in Dubai in Uh February, and then through the of course it's taking place in Japan, and just a heads up on uh. We've also got one for the first time in our fine for New Zealand. We should be hearing about shortly from my colleague Andrew best up.

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George Discala: Um. We also do a bit of work in supporting companies engage online as well. Um through using e-commerce channels uh, particularly in the likes of China and South East Asia um being at the early stages of the export journey. That may be a viable option to consider um, and we do have programs available to enable companies to use those platforms to better understand those markets.

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George Discala: But um plenty more uh details about the various programs that are available. I just wanted to give you a sense of the support that is available. Um! And and your challenges companies is gonna be um, You know which of these programs are going to be best suited for where you are. And I i'd suggest that the best way to do that is to have a conversation with um Will or his team, or whether it be, you know, directly with with global Victoria, whoever that may be.

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George Discala: We need to to better understand um what particular support programs are going to be suit you for where you are at the moment. So that's it for me. I'll now pass over back to to Collins,

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Collins Rex: hey? Very much, George. And uh thank you for that snapshot which is really a tiny snapshot of what is available at global victoria, and I think um at last count uh, when I had a chat to the team there there was something like fifty-five tried missions uh, potentially in the works uh for the next few months. So there's a lot of stuff that goes on there all the time, so make sure that you get in touch with the team, and one of those team members is Andrew Besta, who's the senior trade manager for New Zealand,

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Collins Rex: and I'm delighted to introduce him to you. Now i'll hand over to you, Andrew, to talk a little bit about some of the initiatives that you have going in New Zealand

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Andrew Bester: mit Ctl. And thank you very much, Collins, and hello, everyone. Yes, I'm. Andrew Best, a senior trade manager for New Zealand at Klobuch, and really pleased to be here with you today, and talking about just one of those many outbound trade opportunities that is a trade show to find foods. New Zealand one.

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Andrew Bester: So New Zealand is a really good starting point for food and beverage exporters. Once you've got that domestic network in place, New Zealand is that chance to learn how to manage your foreign exchange, your time zones, your customs, your freight, your logistics, and, of course, your cross border compliance, and a fairly low risk and controlled environment which is topical. Given this risk session one hundred

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Andrew Bester: Now, with that, it also offers geographical proximity and regulatory alignment. So it really is a perfect test market.

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Andrew Bester: Now for our mission to find foods. We are targeting early and first of first time or early stage exporters, or established exporters looking to grow in New Zealand, and we really do see opportunities across the board.

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Andrew Bester: Uh, but particularly in beverages that is, especially wine and zero or low alcohol beverage and premium package, food and health foods and and alternative proteins. Uh, and really again

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Andrew Bester: across the board, big opportunities in the food and beverage sector. So please to email me with any questions, and particularly if you're interested in joining us in Auckland in June of next year. Thank you. And back to your goals

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Collins Rex: mit ctl

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Collins Rex: um. I'm Now delighted to introduce you to Ian Thompson, who's the inmarket specialist um for? Ca: And he's going to talk to you a little bit about what happens in Southeast Asia, and uh, some of the initiatives there. So all yours in.

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Will Dalton: I am sorry before you jump in, and and the apologies. I I should have mentioned it when I introduced the pathways program. But a fundamental part of our program is our in market specialists as well. So

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Will Dalton: we have dedicated um resources funded through agriculture. Victoria uh strategically placed in um these three k markets. So um i'll hand back to you. I have to give us more of an insight uh, and then we'll hear from from Davis, and then I just around things out.

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Ian Thompson: Thanks, thanks. Well, um, i'm coming to you from Kuala Lumpur, where I'm. Based, looking after the whole of the South East Asian region from A. From an agriculture Victoria uh perspective. Um, now South East Asia is actually comprised of eleven countries.

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Ian Thompson: Um. We have six priority markets, being Indonesia, Singapore, Malaysia, Thailand, Vietnam, and the Philippines

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Ian Thompson: Um, and in terms of a bit of data around Southeast Asia. It's forecast to be the world's fourth largest economy by two thousand and thirty.

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Ian Thompson: It's current. Gdp

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Ian Thompson: uh is four point

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Ian Thompson: five trillion, and it's got a population of six hundred million and growing.

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Ian Thompson: Um! It's got the fastest middle class with discretionary spending um in terms of growth, and one of those one of those um examples I can give you is I the last two years total bovine.

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Ian Thompson: Um ex uh imports into Vietnam have actually decreased, however

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Ian Thompson: high quality base, such as the Australian base has actually increased. So it's the buffalo which is coming from India, which is significantly dropped, and it's because of the middle class, with high discretionary spending going to high quality uh proteins that are actually increasing that

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Ian Thompson: Um, the largest food commodities coming into Southeast Asia out of Victoria a red meat

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Ian Thompson: brain processed foods, dairy and horticulture. Um. Each of those has got tremendous um footprints throughout the the whole of Southeast Asia. Um, and

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Ian Thompson: they growing

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Ian Thompson: um.

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Ian Thompson: So my role itself. Um, Three main areas of my role, which includes market intelligence and market research to understand industry trends and going customer insights on the ground

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Ian Thompson: company, profile in the industry, alignment, opportunities,

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Ian Thompson: and then risk and diversification. What are What are the recent in moving into some of these in into some of these Southeast Asian markets. And then what's the best way in looking at those diversification strategies to ensure that risk. Minimization occurs

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Ian Thompson: in terms of um market access.

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Ian Thompson: Um! All support, market

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Ian Thompson: entry and expansion into those markets.

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Ian Thompson: Direct liaison with the Federal um Department of Agriculture

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Ian Thompson: um in any issues at the border. So we've had a number of of issues lately, with containers stopped at the border um changing regulation um permits which have expired, and it's just working with the Federal counselors in market to ensure that those issues are addressed.

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Ian Thompson: Um! And we look at increasing distribution and supply chain networks. So, looking at how you your best position to to make sure that

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Ian Thompson: you're in the right place at the right time throughout that whole supply chain,

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Ian Thompson: and

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Ian Thompson: he is business matching on the ground. And this is where we'll mentioned earlier. Direct liaison with Um. Gv. And their trade managers in market. Um. So we'll work with in market business development.

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Ian Thompson: We'll look at choosing the most appropriate sales channels um We George just mentioned the e-commerce um programs We've got on really exploding in Southeast Asia.

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Ian Thompson: And then, most importantly, Um is choosing the most appropriate importer or distributor for your product

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Ian Thompson: Um, and for the channel and sales outcomes

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Ian Thompson: in market. So where you want to be is it retail, is it e-commerce? Is it food service Um, and obviously working directly in market? We know a lot of the importers and distributors, each with their own um strengths,

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Ian Thompson: and uh, to put you in in touch with those most appropriate for your business.

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Ian Thompson: Uh looking at what's happening right now. Um, there is significant opportunity in Southeast Asia Post, Covid. A lot of importers are looking to expand and solidify their product right? They're trying to protect their their their products and engagement into market.

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Ian Thompson: Um. And this is really important in some markets where product registration can be tied directly to the importer. Um!

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Ian Thompson: So importers at the moment they're experiencing a real appetite for new products to market

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Ian Thompson: health, conscious products

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Ian Thompson: and snacks and beverages,

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Ian Thompson: so

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Ian Thompson: those products are key and uh opportunity right through Southeast Asia. It's not it's. It's not limited to one particular market that is broad across our all our priority markets.

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Ian Thompson: So that is, that is Southeast Asia in a very quick

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Ian Thompson: update. Um real opportunity,

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Ian Thompson: he to work with you all in terms of accessing and diversification into those Southeast Asian markets.

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Ian Thompson: Thanks, Collins.

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Collins Rex: Thanks very much in for that uh succinct snapshot. But encapsulating so many opportunities for exporters in those various markets. So please reach out to Ian if you have any questions, and if you'd like to know more about any of those particular opportunities that he mentioned.

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Collins Rex: I'd like to now pass over to David Shu, who uh joins us from Beijing um in China and uh Davis, of course, is familiar to uh those of you that have joined us in previous sessions, because we've we've heard from him before, and you know that he has a wealth of information to impart. So i'll pass over to you, Davis. One

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Davis Xu: thanks, Collins. Um! Well, hi! Everyone uh my name is Davis, and i'm the specialist uh based in Beijing. Now, my role in China is to support Victorian companies on uh various of mark entry issue. Uh, because, as we all know, there's been some reclamatory changes early this year. So there's whole new uh procedure in entering China market for food and the barriers. So I provide the relevance of to businesses. Also I I offer insights

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Davis Xu: for market trends and information to support any decision making for both. I've come to Victoria and individual companies. For example, recently I'm. Preparing a uh recall on the results of the Twentieth National Congress and the relevant uh agricultural outlook and changes for China for the next decade, and the opportunity and risk that might arise from those changes. I'm. Also working on collaboration between many uh industry associations

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Davis Xu: at issuing join research articles focus on China and issuing relevant industry alerts major policy changes in China,

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Davis Xu: and I'm. Also writing a newsletter article uh uh from the uh Pathway Newsletter, and to offering insights on market trend and discussing about the opportunity that is available on the market right now. So if you're interested, you know we we can help you to sign up to our uh password is let up uh currently. I'm. Writing on the China's alcoholic beverages for the last couple of months um from beers to uh spirits to uh premix alcoholic green,

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Davis Xu: and that is something I'll be focused on how

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Davis Xu: users can take opportunity of uh Chinese holidays and special occasions to promote their products online and offline in the China market.

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Davis Xu: Furthermore, um at Victoria has actually have a facility I call Thick House, that's being uh creating Shanghai to support Victorians in the various Uh industries in China. So the big House provides a permanent display center uh meeting place, and the events venue for business business connections. This facility is a btb only, and currently we have a hundred plus businesses sign up to uh off account pro yet,

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Davis Xu: and sixty companies has already have samples delivered to the vehicles,

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Davis Xu: and we have actually how several uh B two B events uh at the big has already in the past year. Uh, for example, we have the uh spirit appreciation events uh uh, some of fruits events uh private ice cream tasting for Alibaba group, and also the Victorian House food uh breakfast. So this is what uh I am, you know, offering for the China market, and what uh the agriculture of Victoria is. A footprint is in China.

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Davis Xu: So now would we pass back to you colors.

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Collins Rex: Thanks very much, Davis, and thanks for uh, the snapshot

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Collins Rex: of the China Market and some of the uh. The facilities that are available to Victorian exporters there, and our final in market specialist uh today. I'm delighted to introduce you to Emma Page, who joins us out of the Dubai office, and she, uh is the trade specialist for the Middle East and North Africa. So all yours, Emma.

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Emma Page: Thanks. Collins um great to be here today. So, as Colin said, I'm. Based in Dubai, the the Victorian Government Trade and Investment Office

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Emma Page: actually looks, after all of Africa, the Middle East and Cis countries uh, including Russia and Ukraine, when they're not um

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Emma Page: having a conflict, so it's quite a a big region from a food perspective that is, find into the the Middle East and North Africa, and predominantly within the Gcc. Country. So Uae Saadi, Qatar, Bahrain kuwait um. So there the the regions that I primarily focus on, although there are emerging opportunities in places like Egypt and Turkey as well, which we're exploring.

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Emma Page: Um. So my role is a little different to to in and Davis. So we all sort of sit differently in our markets. And what we do, I don't have any trade, specialists or trade managers here. Um, that I work with. We are quite small team in device. So it is myself actually looking after from a trade perspective. So doing the introductions, the connections as well. Um opportunities that we're seeing from a a a food and beverage point of view in the Middle East like it's, it's a growing. It's a

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Emma Page: booming population. So five hundred million people across twenty countries in the main region so real growing opportunity there. And as they're buying, habits change, and and the countries develop. We're really seeing a lot of Western influences and a demand for premium food which Australia and Victoria can fill. So currently. Victoria only exports point six percent of all supplies to the the main region, so obviously there's an opportunity

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Emma Page: there. Um!

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Emma Page: The Middle East is we? We, you know, heard about New Zealand, where it's very similar to Australia in terms of an operating environment. The Middle East is very different. It does have its challenges, but there are a lot of rewards there for the businesses that take the time to to learn the market and invest in that opportunity. And because this part of the world. Um, as you know, a lot of it's desert, so it imports between eighty to ninety percent of its food that is changing. Um, you know, due to Covid, and, like the rest of the world,

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Emma Page: you know the the word food security, as the the region establishes it's, it's food, security and growing its own food. But obviously you still limited because it is a desert. And

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Emma Page: so there is a lot of opportunity there. But businesses do need to take the time to really understand the market and the challenges. And once you understand that you can do business and you can do business well, and so that leads me to to gold food a great way, with a very much a face to face market in the the Middle East. Um, like my colleagues in Asia and and South East Asia and China. It would be similar there, like You need to to visit the market to understand, to establish these connections.

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Emma Page: Um! And then you're able to do business. Uh: so gold food is a great opportunity to get off the plan. Get out of the Dubai airport and come and really understand what the market looks like, even if you've been here before. It's a rapidly changing market in Dubai, but also further afield. Um, in places like Saudi Um. So with go through, that's happening from the twenty to twenty fourth of February, global Victoria is leading a delegation for the first time since Covid,

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Emma Page: so we will have floor space. We will have exhibitors um on. Stand at gold food as well as a support program for for those businesses that might not be exhibiting, but want to come and understand the market. So we're working with always tried to deliver some retail visits, some industry, briefings from experts in the region, as well as a business networking event which will feature and showcase Victorian products.

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Emma Page: Um, that's on the Monday, the the twentieth of February. So that is gold, food, and the region in a nutshell. But I really would encourage you to to reach out if you're interested in doing business in this part of the world, because there really is a lot of opportunity here.

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Collins Rex: Wonderful! Thank you very much, Emma, and with relatively small market penetration there certainly is a lot of opportunity waiting there.

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Collins Rex: Thanks very much, and thank you to all our inmarket specialists for the snapshots that they've given us. I'm going to pass you back to Will, He's going to say a few more words, and then we'll have a quick look at Austrade and Ip, Australia. And in the meanwhile any questions you have, please feel free to type them in the Q. A. Box I'll pass back to you, will,

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Will Dalton: and, thanks to the presenters. Um, yes. So

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Will Dalton: there's a few questions on. I'm just looking through, and I I thought I I might um just even call them out. Um! So lay. Is there a single person who you can work with to navigate these three guys great agencies. So yes, that is, that is my team in pathway. So we have very much that sort of um first point of call in terms of opening the door to other parts of um

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Will Dalton: government. And whether you're you're actually right to be going on a trade mission and therefore talking to Gb: or whether you

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Will Dalton: Yeah, so very much um myself or Jay um who are both online. So you can feel free to um my contact with us. We could set up a time to have a chat absolutely. Um and uh, in terms of Hassan's question there about the arm and support, we might get in touch with you. Um separately about that. Um, because there's a few

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Will Dalton: um a few things to to work through there. Um and um in terms of phases. Question as well about startups. Um, there's a number of programs that um support startups, and um. My, my understanding is the accelerator to

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Will Dalton: program. So um the of uh rocket cedar phaser um, but also uh sprout x um, and then launch Vic is the Victorian Government. Some startup agency as well, and they fund a number of um programs for startups. Um!

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Will Dalton: But it is a tricky one that the startup area. Because um i'm not aware of any um actual cash grant type arrangements um

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Will Dalton: just given that um it is often that um pre-requisite to to demonstrate um. You know the commercial nature of the of the business, and and to reduce the risk of um of taxpayers money being allocated um to to start ups, which often have a high um by turn of and right so, and I think it was picked up earlier in the presentation, too. But

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Will Dalton: but look um! And then Kelly ran your point. Uh it's a good one. Um! I I can't answer that off the top of my in terms of those containers. But, uh, I have there that there's plenty that are floating around about the place. Um, Collins, Do you have any thoughts? Um, yeah, Look, They they actually generally don't even try to recover them. Once they go overboard they go overboard.

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Collins Rex: They lost to time. Um! And it does also mean that the insurance that is carried by everyone on that particular container, depending on how it fell overboard. So if it fell well, it's lost, and you ever had goods in that container claims of their insurance. If, however, it was pushed overboard, because it was considered that the ship was in imminent danger, if it didn't reduce its load if that container was wilfully pushed overboard. It's considered to have been done to save the lives of the

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Collins Rex: and all the remaining cargo. So everybody

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Collins Rex: on that uh ship then splits the cost of the insurance of the cargo that was lost in that way. So uh you'll have to claim against your insurance, and you have no choice but to pay it. Um! It's just the way of the C. So uh that's an interesting one, but he's no one, No one reclaims those Kelly. So if you wonder about, and you find one floating around in the wives feel free to help yourself, It's considered to be free free and fair game for everybody. Pretty much so. Um,

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Collins Rex: yeah, it's a It's quite an interesting one. Um, we might also.

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Will Dalton: Finally, I just wanted to say that the um all the um resources, links, contact data, slides, et cetera, will be emailed out at the coming days. So um do not do not fear. If there are things that you want real um that that will be provided at, including links to business. Victoria's grad have where there'll be information, for example, on all the different graphs that are available. So

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Collins Rex: So i'll hand back to you, calls Thanks very much Will, and just in the for the sake of complete this for today's session. I think it's. It is important that we understand that there are a couple of other agencies that could be really important touch points for everyone that has come through this program as well, and the first of those is a trade. And of course we're all familiar with the fact that Austria is the Australian Trade and Investment Commission. It's the Australian government's, International trade, promotion and Investment Attraction Agency, one hundred and fifty

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Collins Rex: and they do a raft of different things for Australian exporters, including generating market information and insights. They promote Australian capability, and they facilitate connections through their extensive global network. Now, we've heard today from global Victoria. Um. And of course, global Victoria has a a pretty decent network internationally the best of all the State governments, but also trade simply because it is the Federal agency has a much larger footprint. Um. So us trade can help you by providing general in

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Collins Rex: about exporting and also about market access, and that information is provided free of charge. But they also do tailor-made services which will help you with specific market entry, questions, research and advice, et cetera. Do you bear in mind, though, that those specific tailored services are offered at a cost so general information available, free of charge, Specific information is available at a cost. If you go to the ostrich website, you can also find a guide to exporting

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Collins Rex: mit ctl, and which is the A. To Z of basic exporting. There's an export ready quiz, and I believe there's There's a link from the Agriculture Victoria site to that one as well. There's the trade start program that will help you connect between us, trade and all its services, and then all the other markets that you might want to access, very much seen as an entry level program. Um, They also help you find export markets, and there's a lot of information available on the website about those case studies and the like two hundred and fifty

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Collins Rex: tourism statistics which might seem irrelevant to um agri-food exporters But it's actually a very relevant one, because it will give you a sense of how many people from which countries come to Australia. They come here, they try the goods, and then they go home, and they look for them on the shelves. So it's a really good way to reach an overseas market in a relatively simple way, and then, of course, they is the export market Development Grant, which is an eligibility based market, a rather demand driven

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Collins Rex: Grant and calling it a grant, is a bit of a misnomer because it's really um

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Collins Rex: an entitlement rather than a grant program. And if you want to any more information about that, i'm happy to share that as well. And then, of course they also do give investment advice. So if you want to set up in market, as trade will be able to help you with all of that information?

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Collins Rex: Um. So the question, Lee, that you ask is, what can Os trade provide that global Vic? Cannot I guess the the short answer there is that because us trade is so much larger and they have such a much larger footprint, they have way more in market specialists that can assist you on the ground. Um! We are very fortunate, though, in the state of Victoria to have global victoria in our corner, because they do a lot of stuff for us on the ground. But Australia just has more people, so I guess that's uh That's

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Collins Rex: a fair answer there and then very important as well, and we've talked in previous sessions about the importance of protecting your intellectual property. But to do that in Australia you're going to do that through Ip Australia. Ip Australia is the Government agency that administers all intellectual property rights, legislation for patents, trademarks, design rights, and plant breeders, rights and blood breeders. Rights could be of importance to many of you on today's session.

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Collins Rex: But definitely, when it comes to trademarks and patents, those are ones that you need to be across, and you need to be protecting that stuff. Ip. Australia will register all of those in Australia, but they can also advise you with how to do it in other markets, because, remember, you do have to protect your intellectual property in every single market in which you are active, A lot of Ip Australia services are available online. You can apply for your Ip rights online, you can renew your application

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Collins Rex: online. You can make payments, et cetera. Um. And there are any number of additional facilities and resources available, including market information for specific markets. And what intellectual property is there, how it operates, how it functions, and what you need to do to protect yourself, and then through Ip. Australia. You can also access international application systems through the world, intellectual property, organization,

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Collins Rex: all we po, and again, a wealth of information available there,

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Collins Rex: and that brings us to the end of today's formal session. Um, i'm going to ask all of our panelists just to turn on your cameras, um, and your microphones. If you have any questions for the team, any of the team members feel free to type them in the Q. A. Box now, and we'll take any of those additional questions that you might have.

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Collins Rex: And um while you're thinking of any other questions. Well, i'm going to pass back to you, and you can wrap up today's session for us, and just give a little bit of additional information about the sorts of resources that people can expect to find if they go to the export hub and where they can go, and when they can expect also to have access to Webinar recordings and other resources. One hundred and fifty.

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Will Dalton: Sure. Thanks. Uh: thanks, Collins. Um: Yeah. So we'll send out some um correspondence after this uh after this session um with materials, including um

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Will Dalton: details about our link to it, exports hub, but we could probably even drop drop it in the chat now for people to access immediately. But

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Will Dalton: um on there. Um! You'll find information about the end market specialists about uh v cast, which is the facility that Davis um referred to earlier in in Shanghai, where where businesses can uh showcase product.

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Will Dalton: Um in a virtual environment. Um and uh, but there's also yeah links to the um export readiness. Quiz. There's um back conditions of our newsletter.

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Will Dalton: Um! There's quite a lot of information there, and um we we are loading additional content on there. Um as we speak, and and this Webinar recording will will be on on the on the hub in in due course uh team. Um, and we'll commute. I mean this way for us to communicate it to our clients and to to industries for our newsletter.

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Will Dalton: Um! So um make sure you you sign up to the Newsletter. I think that is the best way to stay engaged with um with the team, and we also then have a record of of of who you are. And um, you know, it helps us in terms of knowing who who we've engaged. So uh um,

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Will Dalton: yeah, I think. Um, that's probably all I all I wanted to say, Collins um noting that a couple of things have come up in the chat about uh the whole food, which M. Is just reminded everyone about

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Will Dalton: um. And then there's the fine Food Mission next year in New Zealand, so that's something as well. Um, I guess. Uh my my message to to to table is that don't be shy. Just um. If there's something on your mind,

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Will Dalton: you know, flick an email through um, you can send an email to um pathways to export at agriculture, and we will

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Will Dalton: do a mighty best to try and um find an answer, for you will connect you with the right person. So um, we understand that dealing with government can sometimes be uh a bit a bit ominous. But um, we we we we we can help you with that. So? Um. Yeah. Um.

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Will Dalton: I think that's um. That's probably it from May.

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Collins Rex: Thanks. Thanks very much. We'll and do, please. We'll check the chat because there is a a a number of of bits and pieces of information there, including links and um. Do bear in mind that for gold foods uh the thirtieth of November is the closing day. So if you're going to be part of that, you need to get in now, because uh November is almost done which I find horrifying to say. But, uh,

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Collins Rex: the end of the month is insight, and of course we know the Christmas decorations are everywhere already, so you know you can run, but you can't hide. Time catches up with us all. Um! They don't seem to be any further questions. I think, Austin answered. Um. You will, of course, get my contact details as well when you get the follow up to today's session, so feel free to reach out to me. If you can't remember the pathways to export address, and i'll make sure you get all the information that you could possibly want. So thank you. Everyone, thanks to Yuri for joining us as well,

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Collins Rex: and to the entire team. It's been great having you all around for this uh series, and it's it's been a lot of fun as well. So thanks everyone, thanks for being part of it, and for all your time and energy in attending all the various webinars that we've had as part of the series, and look forward to your pleasure of your company at a future time. One hundred

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Collins Rex: thanks, everyone. Have a good afternoon, evening morning, wherever in the world you might find yourself and go off everyone and do some great business.

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Collins Rex: Thank you. Well, goodbye, Everyone.