1. Australia and New Zealand Australia and New Zealand Explore Export 2011 Explore Export 2011 Out of the Ashes comes business...

2. Contents 1)Australia economic & political overview 2)Australia challenges & opportunities 3)New Zealand economic & political overview 4)New Zealand challenges & opportunities 5)Why do business in Australia & New Zealand? 6)Opportunities for British business 7)What we can do for your business

3. Australia - Overview

4. Australian economic/political overview  World’s 14 th largest economy, GDP approx US$1 trillion  Annual GDP growth rate 1998-2009 average 3.5%, significantly higher than US, UK, Japan, France and Germany  The only advanced economy not to have fallen into recession during the recent economic downturn  Ranked as the world’s most resilient economy for six out of the last eight years*  Service industries make up approx 70% of economy, manufacturing around 10% and mining and construction around 8% each** *IMD World Competitiveness Yearbook, 2009 ** Australian Bureau of Statistics

5. Australian economic/political overview  Australia has a sound, stable and democratic political environment that provides certainty to businesses  The UK is the second largest foreign investor in Australia, with stock worth AU$499 billion and invested another AU$34 billion in Australia in 2009 – 21% of total new investment*  The UK is Australia’s second largest trade services partner**  Over 1,000 British companies do business in Australia each day  Europe accounts for 34% of all foreign direct investment in Australia, creating around 1.4 million Australian jobs***  Harvard Business Review named Australia as its No 1 country to invest in Jan/Feb 2011 *Australian Bureau of Statistics, 2009 **Department of Foreign Affairs and Trade (DFAT) ***Austrade, Sept 2010

6. Australia – challenges/opportunities  Resources boom –How long will the boom last and what will replace it?  Strong dollar – exports and tourism suffering  Adapting to a larger population –Growth predicted of 65& (35 million) by 2049 (fastest in OECD) –Will cause housing/water/power/infrastructure/enviro challenges  Skills shortage in mining and construction –Shortage of engineers, construction industry professionals and skilled tradespeople  Aging population/rising healthcare costs  Moving to a lower carbon economy – overdependence on cheap fossil fuels  Developing the National Broadband Network

7. New Zealand - Overview

8. New Zealand economic/political overview  New Zealand has a sound, stable and democratic political environment that provides certainty to businesses  Biggest trading partner is Australia, followed by China, US, Japan and UK – UK exports with NZ worth £390m in 2010  NZ economy generally performing well compared to other advanced economies despite effects of earthquake – GDP 2011 forecast is 1.4%*  World’s 2 nd easiest country to do business**  Worlds least corrupt country (equal)***  Services account for around two-thirds of New Zealand’s GDP and manufacturing almost 20%  Significant proportion of NZ exports based on primary production, followed distantly by ICT and pharmaceuticals *NZ Treasury ** The Economist, June 2010 ***Reserve Bank of New Zealand

9. New Zealand – challenges/opportunities  Free Trade Agreements (FTAs) –NZ has signed multiple FTAs with major trading partners China, ASEAN, Singapore in previous five years –First OECD country to sign FTA with China (2008) – since then NZ exports to China have increased 37%  Christchurch earthquake February 2011 –Estimated NZ$11 billion damage bill –Big opportunities for UK companies in rebuilding infrastructure  Government debt rising –Cumulative operating deficits and weakened balance sheet could disrupt major public spending and ability to weather future shocks  Science and innovation –Govt technology grants and voucher schemes present opportunities for UK businesses – especially in clean tech and venture capital

10. Why do business in Australia and New Zealand?

11. Why do business in Australia & NZ? Strong economy  Stable economies with good current and future growth prospects Business, legal & cultural similarities  Familiar business, legal & regulatory framework  Common language & customs  Strong IP protection  Many British businesses already there  High regard for UK products Gateway to Asia  Skilled, educated, multi-lingual workforce  Asia still the region of the world with the highest potential growth Quality of Life  5 Australasian cities in world’s top ten most liveable cities* * The Economist, Liveability Ranking, 201011

12. Australian sector opportunities

13. Opportunities – Oil & Gas  5 th largest oil and gas industry in Asia Pacific and 14 th in the world (worth A$100 bn)  More than A$87 bn predicted spend on new petroleum projects in next 10-15 years  Oil and gas industry predicted to grow at two to three times economy for next 15-20 years  A$43 bn Gorgon, Ichthys and other very large LNG projects expected to provide significant opportunities for UK companies  5 major areas of opportunity for UK companies within Oil&Gas are Subsea, Health & Safety, Skills & Training, Science & Technology and R&D

14. Opportunities – Biotechnology  Australia biotechnology hub of Asia-Pacific, world’s 6 th largest market  Aust. health system spend in 2006-07 A$90 bn (£50 bn)  Expected to increase to A$110 bn by 2012  Fast growing and aging population expected to greatly increase market size  The sales of medical devices in Australia amounts to around A$2.5 billion per annum (£1.4 billion)  Australia’s Nation Building plan includes significantly increased funding for local healthcare infrastructure

15. Opportunities – ICT  Already one of the best prospects for UK businesses in Australia, consistent stream of ICT companies succeeding in Australia  A$43 bn National Broadband Network (NBN) planned to cover 98% of Australia in 10 years, will further expand opportunities and provide surety  E-health, e-utilities, e-learning and smart grids likely to be big growth areas

16. Opportunities – Low Carbon  Environment and low carbon worth A$22 billion - expected growth of 7% pa  A$2.3 billion Govt assistance package to encourage innovation and investment in clean energy technology  A$20 billion required to meet Australia’s renewable energy target alone, estimates suggest  Big opportunities for UK companies, particularly in joint ventures and using Australia as gateway to Asia  CPRS scheme delayed to 2013  Australia recognised by UKTI and British environment industry as high opportunity market

17. Opportunities – Food & Beverage  Strong opportunities for foodstuffs and allied processing technology with favourable exchange rate  Two supermarket chains in Australia claim 70% of the market, but this is being eroded by cut price and high end retailers  Majority of private label products sourced from overseas  Australian consumers won’t preferentially ‘buy British’ but tastes and culture are aligned well with UK

18. Opportunities – Education  Education makes up 4.4% of Australia’s economy  Australia already imports A$330 million in printed matter from the UK  A$1 billion govt funding announced in 2009 to build science laboratories and language learning  And A$1.6 billion for infrastructure investment and facilities in the training and higher education sectors

19. Opportunities - Business & Financial Services  Australia’s largest contributor of GDP – approx. 70%  Sydney and Melbourne financial hubs for Asia Pacific after Hong Kong and Singapore  Australian Stock Exchange (ASX) world’s 8 th largest, possible take over by Singapore Exchange in 2011  Aussie banks had low exposure to financial crisis and banking system remains strong  World leader in sophisticated retirement products due to compulsory ‘super’  Strong opportunities in fund and wealth management, Islamic Finance, M&A advisory, Forex, Project Finance

20. New Zealand sector opportunities

21. Opportunities  Infrastructure –Rebuilding Christchurch’s infrastructure after the earthquake –Electrification of Auckland regional rail network & Auckland city rail loop  ICT –National Broadband Network and Rural Broadband initiatives worth NZ$1-3 bn –Digital media opportunities arising from improved broadband and digital TV network –Software – Opportunities in health IT, educational resources, e-government  Medical Technology –NZ has one of the best funded public health sectors in the world –Imports of $1bn of medical devices each year  Life Sciences –World leader in research and development Including: therapeutics, diagnostics, regenerative medicines, industrial bio processing, bio fuels, specialism in cancer, diabetes and other similar diseases

22. Opportunities continued  Renewable Energy –Best wind, wave and tidal resource in the southern hemisphere, including:  Marine Energy Centre project  Geothermal projects  Biomass/ Gasification  Agriculture –Opportunities for farming equipment, breeding, genetics, fertilisers –New rules opening door for imports of Pork and Turkey products  Oil & Gas –Huge potential offshore reserves of Oil & Gas –Some commentators calling NZ the ‘Southern Saudi’ –Several companies actively exploring NZ waters –Very favourable market for companies with North Sea expertise in deep water

23. Opportunities continued  Education –Development of ICT infrastructure in education is a priority for NZ Gov –Noticeable shift in procurement from physical to digital/online resources  Creative Industries –High-performing creative computer services & gaming developers –British music continues to be an area of opportunity in New Zealand –Internationally successful film industry particularly in areas of animation & post production  Marine –The marine industry is estimated to be worth NZ$2.2b to the NZ economy –One of the highest rates of boat ownership per capita worldwide  Rugby World Cup 2011 –More than 80,000 visitors worldwide travelling to NZ for the rugby –UKTI hosting business networking event for British & New Zealand businesspeople on Thursday 29 th September in Auckland

24. What we can do for your business

25. What can UKTI Australia & NZ do for you?  Local knowledge: Tailored, experienced, impartial advice to maximise your chances of succeeding in Australia  Product launch: In one of our function rooms, available in most capitals  Introduction service: To prospective business partners, distributors, suppliers and Australian Govt bodies  Promotion: PR to local media, UKTI e-newsletters, emarketing and social media campaigns  Test the Market: Reduce the cost, risk and time of establishing your business in Australia by working in one of our business centres  The ANZ OMIS - Joint Overseas Market Introduction Service (OMIS) offering for both countries

26. My contact details Paul Noon Deputy Consul-General & Director of Trade, Australia and NZ Email – paul.noon@fco.gov.uk Twitter @uktiaustralia @uktinewzealand Websites //ukinaustralia.fco.gov.uk/en/business //ukinnewzealand.fco.gov.uk/en/business