Transcript Investment in Australian agribusiness

Investment in Australian
Agribusiness
Tony Eyres, Senior Investment Specialist
Austrade Sydney
Australia: a Partner for Growth in Asia
Economic Profile
 Open economy
 Free trade economy
 No/few subsidies for agriculture
 Low agricultural land prices (on a cost per unit of
production basis)
 High input costs (labour, energy), relative to Brazil, US,
NZ
Taiwan: strong economic ties with Australia
Taiwan and Australia (as in 2015)
 10th largest export market for Australia
 A$12.4 billion in total two-way trade
 A$7.4 billion of inward investment from Taiwan
Complementary Trade Relationship
 Taiwan imports over 90% of its agriculture and
food products and energy sources, these are
Australia’s major export items
 Major Exports to Taiwan: Raw Materials
o Coal, iron ore, aluminum and beef
 Major Imports from Taiwan: Refined and
Produced items
o Refined petroleum, telecom equipment &
parts, computers, motorcycles & cycles
Agribusiness and Food
Market Overview
 Australia is the 4th largest agriculture
and food supplier to Taiwan
 10th major export destination for
Australia
 A$793 million agricultural export value to
Taiwan in 2014 -15
 Taiwan has well-established modern
food retail outlets
Major Australian Food Exports to Taiwan
 Meat
 Dairy
 Wheat/Oats
 Wines
Agribusiness and Food
 Premium wine and quality packaged food are in demand
Taiwan has a growing taste for Australian fine wine with exports rising
47% to A$15 million last year, and Australia the 5th largest wine
supplier in Taiwan
 Fresh produce
Counter season supply from
Australia presents competitive
advantage
 Natural & organic products, and
sustainable seafood
Consumers increasing health
consciousness, and concern for
food safety and traceability
Investment Thesis for Australia
 Long history of attracting foreign capital
 Significant interest from foreign investors – political/economic
stability
 Significant capital investment required
 Low A$, low interest rates, relatively low land price, high liquidity
 “Food narrative” resonates
 Strategic location – proximity to Asia, transport infrastructure
 Strong demand for Australian agri-food products – ‘Clean & Green’
People: Products: Places
Products
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Direct access to quality inputs
Abundant land and natural resources
Supply chain integrity
Biosecurity bonus; traceability
Sustainability and health credentials *
People
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High productivity; resilient
Highly educated workforce
Excellent research institutions
Early adopters and innovators
* Austrade’s Brand Australia Food Strategy Research, 2015
Places
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Proximity to Asia
Sophisticated domestic market
as a base to scale up into Asia
Stability
Overview
 Large variety of geological and
climatic zones, ensuring
the availability of a
broad range of fruit
and vegetables
for export across
the year
Opportunities
 Participating in integrated supply chains
Top Agribusiness and Food companies in Australia
 Grains
GrainCorp / CBH Group / Glencore / Cargill / Bunge
 Beef processing and feedlots
JBS Australia, Teys, Cargill, Minerva (July 2016)
 Crop protection/fertilisers
Nufarm, Elders, Wesfarmers, Monsanto, Dow, Incitec
Key Players in Australia’s Grain Supply Chain
R&D:
Inputs:
GRDC; CSIRO
(Australia’s
Embrapa)
Elders; Wesfarmers; Crop
Protection Companies
(Monsanto; Dow; Incitec)
Logistics:
Road/rail; Aurizon; Pacific
National; ARTC
Farmers:
Fragmented; 80/20
rule applies
Storage & Handling
“up-country”:
CBH; GrainCorp; Bunge; Louis
Dreyfus; Cargill; Viterra
Ports:
Traders:
Qube; Graincorp;
CBH; Viterra; Bunge
A,B,C,D* and Japanese trading
houses (eg; Sumitomo’s
Emerald Grain)
*A.B.C.D = ADM, Bunge, Cargill & Louis Dreyfus
Resources and Energy sector at a glance
Largest single
Generated
export earner;
A$194.6 billion
mining and
in export income
services
in 2013‒14, 58.6
represented 10.4 per cent of total
per cent
export income
of GDP
Export earnings
projected to be
A$240 billion
in 2019–20
Employed
269,000 people
or 2.3 per cent
of the national
workforce
Invested
A$6.6 billion
in minerals
and petroleum
exploration
Australia’s commodity world rankings
RESOURCES
WORLD
RANKING
PRODUCTION
IRON ORE
52,578 Mt
1
609 Mt
2
URANIUM
1.2 Mt
1
6.4 Mt
3
62,095 Mt
5
538 Mt
5
GOLD
9,808 t
1
265 t
2
ZINC
62.3 Mt
1
1.52 Mt
2
NICKEL
19.0 Mt
1
0.234 Mt
4
COPPER
93.1 Mt
2
1.0 Mt
5
BAUXITE
6,281 Mt
2
81.1 Mt
1
COMMODITY
COAL (BLACK)
WORLD
RANKING
Policy and Regulatory
 Secure land tenure system, with different titles/rights
 Advanced and secure water rights (and trading) system
 Stringent environmental laws (land clearing, EPBC)
 Stringent biosecurity laws (a bonus)
 Foreign investment policy – FIRB
 Northern Australia – Government support
Northern Australia
Northern Australia water infrastructure priorities
Scale of Northern Australia’s Irrigation Potential
 Natural resources sufficient to support 1.4 million
hectares of irrigated agriculture exist in Northern
Australia.
 This will increase by around 50 per cent of Australia’s
total irrigated area.
 The current irrigated
agricultural footprint
in Northern Australia
is very small.
How we can help you
The Australian Trade and Investment Commission
(Austrade), in cooperation with State and Territory
governments, provides free and confidential assistance
 National coordination of Australian government investment services
 Information on the Australian business and regulatory environment
 Market intelligence and investment opportunities
 Identification of suitable investment locations and partners in Australia
 Advice on Australian government programs and approval processes
Contact details
Tony Eyres
Senior Investment Specialist, Resources and Energy
Australian Trade and Investment Commission (Austrade)
Level 23, 201 Kent Street
Sydney NSW
T: +61 2 9392 2408
M: +61 429 069 072
E: [email protected]
W: www.austrade.gov.au