Australian Agribusiness: Asia export opportunities strong, but contracts key

The opportunity for Australian Agribusiness export into Asia is niche premium product in significant volumes

2019-06-13

Our Agribusiness industry experts recently attended Sial China, Asia’s largest food innovation exhibition. Our experts spoke with many Australian and Chinese businesses to understand their challenges and identify synergies that provide opportunities.

Steven Edmonds, Partner, stated that “Attending Sial China provided us with a great opportunity to meet with some of the 3,400 exhibitors from over 100 countries. We learnt about food trends and innovation from around the world and are excited to be able to share these insights with our clients, adding practical experience and strategic advice. Australia is uniquely placed to capitalise on growing Asian demand and our knowledge gives clients an advantage to supply agreements and investment opportunities to expand current business operations.”

Michael Dwyer, Associate Director, commented that “China’s growing middle class is driving premium branded foods and restaurants. Innovation in the Asian agri-food market, particularly businesses addressing challenges in the food supply chain, are seeing the rise of new design and technology to meet future opportunities.”

Through our ShineWing International network, we currently have a number of Chinese companies seeking supply arrangements with Australian fresh produce companies. Steven Edmonds toured business facilities including cold storage assets, warehousing and distribution centres of a key ShineWing China client. The business is actively looking for a range of Australian food producers, and have engaged ShineWing Australia to identify Australian agribusiness opportunities.

Reputation of Australian agribusiness

Australian produce has long had a geographical advantage in Asian markets, but with economic growth there are other considerations that can’t be ignored.

The country of produce is one of the core decision making criteria that Asian produce importers consider in the purchase decision. Australian brands continued to establish the theme of food safety, sustainability, and premium product messaging; a theme that resonates so well with consumers in both Australian and Asian markets.

However, leveraging the premium product reputation of Australian agribusinesses only forms part of the equation for successful export into Asia.

Key consideration factors for Asian food importers

Australia is not alone in seeking to fill the niche premium produce opportunity in the Asian markets. In addition to country of produce, Asian importers also place considerable weight on these factors:

Price

The ability to generate a profit margin on the transaction is a pre curser to entering into the commodity supply agreement and the overarching business engagement.

Volume

The Asian markets continue to focus on guaranteed supply agreement quantities to meet consumer demand. This is a key consideration when supply agreements are being negotiated. 

Shelf life

This is key for the viability of a supply agreement. Australia’s relatively close proximity to Asian markets means Australian producers have an advantage over many growing regions, especially those in South America. These factors are just as important, if not more important, that the country of purchase when selecting produce.

Successful export supply arrangements into Asia for Australian agribusiness

When speaking with Australian Agribusiness exporters at the trade show, Danny Armstrong, Managing Partner, commented that 

“Having worked with many large exporters and understanding in detail unique elements related to trade with China, ShineWing Australia is very well placed to assist Australian businesses of all sizes with export arrangements including supply contract negotiation and execution, international tax structuring arrangements and putting in place appropriate mechanisms to ensure multiple ways of getting paid.”

Open doors into Asia through our international network and mainland China offices, offering a safe and trusted gateway into Asian markets.

 

 

Danny Armstrong

E darmstrong@shinewing.com.au

Steven Edmonds

E sedmonds@shinewing.com.au

Michael Dwyer

E mdwyer@shinewing.com.au