Asia poses both a threat and significant opportunity to Australian manufacturers, Austrade's Phillip Bourke told the Manufacturers' Monthly Leaders' Summit. By Alex Heber.
By 2025, it is estimated there will be 2 billion people living in urban areas, or about 50 per cent of global population, and about 50 per cent of the world's urban population will be living in Asia.
"Asia will become the centre of consumption, with a rising middle class," Austrade trade adviser, services and manufacturing opportunities, Phillip Bourke said.
Addressing the Leaders' Summit in Melbourne, he explained that urbanisation and increasing wealth are set to transform Asia.
"We will see changes in their desires for mobility, health, food, leisure, infrastructure and education," Bourke said.
Currently Asia is the centre for low-cost production, and offshoring of Australian manufacturing activities is a fact of life, but Bourke explained Australia still has a valuable place hold in the sector.
"We still have a place in terms of value add technology, design some of the higher end stuff we can still manufacturer in Australia and still have a niche there to supply," he stated.
Bourke said that although Australia's relationship with Asia as a trade partner has "waxed and waned over the years," it has experienced spectacular growth.
"At Federation Asian trade with Australia was less than 10 per cent of our total trade; now it's about 70 per cent and Asian countries make up eight of our top ten major trading partners," he said.
With the launch of the Labor Government's Asian Century Whitepaper in October, innovation in advanced manufacturing, and a transformation of organisations like Austrade, Australia is in the right place at the right time, moving from the tyranny of distance to the power of proximity.
"Within Austrade, we've responded to this in the past couple of years with a significant reorganisation of our resources, both offshore and onshore," Bourke explained.
"Austrade is a global operation with about 1000 people; around half of which are based overseas.
"In Asia we have 44 officers in 15 countries; we have 11 officers in China and 11 in India," he said.
Recently Austrade has also opened offices in Mongolia and Western China to support mining, manufacturing and other penetration opportunities into those growth areas.
Bourke said the organisation has undergone internal reorganisation to identify and address specific regional themes for Australian manufacturers, outlining Singapore as an aviation and aerospace hub; as well as Singapore, Malaysia, and India for defence projects.
The organisation has also identified a strong need for health and aged care infrastructure, products and services in the Chinese and Malaysian markets.
Austrade is now geared up to assist Aussie manufacturers looking to jump into Asia, offering both onshore and offshore initiatives, including networking events such as tradeshows and conferences, and its Export Markets Development Scheme.
The organisation also has a network of business development managers who identify business opportunities for particular products or services and distribute the potential market play through Austrade's database to facilitate exporting.
For manufacturers looking to offshore opportunities, Austrade also conducts market research, introduces companies to specific markets, and builds relationships between exporters and clients.
"When wheeling and dealing with Asian markets, relationships are all important, you can't just expect to go there once and think everything will roll out," Bourke said.
"Asia is not one market it's many markets, and they're all different."
(Originally published in Manufacturers' Monthly's Leaders' Summit supplement, and based on the magazine's annual Leaders' Summit, held in May.)