Small Business

Going global

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One of Australia’s champion equine export businesses had to muster all of its business prowess to overcome the threat to its international reputation following the outbreak of influenza.

That business, the Victorian Racing Club, last year won the Australian Government and DHL Exporter of the Year award for tourism and events.

In August 2007, the VRC’s deputy chief executive, Sue Lloyd-Williams joined the other 2006 export winners in Melbourne to share their export secrets. (I was the inquisitor who was charged with the job of drawing out these trade-making pearls of wisdom.)

On the panel were a few people who knew a thing or two about flogging Aussie products and services to global markets.

It included Sam Walsh, CEO of Rio Tinto; Graeme Scott from ResMed; Didier Elzinga of Rising Sun Pictures; Robert Phillpot, MD of Aconex and Leane Preston of Wildchild, who took out the small business exporter award.

To comprehend the export role of the VRC’s Melbourne Cup carnival, in 2005 attendance figures were around 383,000 of which 32,000 were from overseas. The global television audience topped 700 million people in 120 countries.

Last year, the attendance figures exceeded 418,000 people, meaning the growth of patronage has been 54 per cent over the past ten years.

Our equine exports in 2005-06 were more than $135m and the exporters sold everything from thoroughbred breeding racing horses, safety stirrups, exercising equipment and feed mineral supplements, to vocational and recreational horse management, jockey training, stud groom training and rehabilitation centres.

This involves a lot of small and medium-size businesses and their employees.

Since 2001 the VRC has hatched a plan to internationalise the event, not only to maximise the revenue for the racing club, but to add to Victoria’s and the country’s goal to grow the tourism industry. The influenza outbreak represents an enormous challenge.

“The Spring Carnival delivers a gross economic benefit to Victoria of $628.8m, of which $419m is generated by the Melbourne Cup Carnival,” says Lloyd-Williams. “Losses to date are linked to the lack of wagering turnover, but VRC has not had any other loss impacts to date.”

Lloyd-Williams thinks the virus is outside VRC control and therefore will not directly impact on the club’s reputation.
For one of the country’s top exporters, in Rio Tinto, Sam Walsh is very bullish on his company and the outlook for commodities.
“Everyone talks about China, but India is becoming a big customer,” he says. “And don’t forget Russia.”

Walsh acknowledges the strength of the global economy and thinks has a long way to run, but he reflects on the pioneers for Rio Tinto in the ‘60s who invested in mines, railways and ports on the belief that the business would be a success.

Getting a first mover advantage and protecting your intellectual property are seen as important for making your mark as an exporter.

“We were the first to do this sort of thing for people with sleeping disorders,” says Resmed’s Graeme Scott, director of supplier alliance and logistics. “And we protect our IP.”

Resmed was the 2006 Australian Exporter of the Year Award winner and 2006 Large Advanced Manufacturer Award winner, booking net revenue last financial year of $US716.3m against $US606.9m the year before.

Clean and green

In contrast, and at the other end of the model exporter catwalk was Perth mother of three, Leanne Preston, who literally took her business from the kitchen table to take on some of the world’s biggest drug companies. And she has them ‘scratching their heads’ on how they will contain her erosion into their market.

When Preston’s daughter came home from school with head lice she was horrified, but she was more shocked when she read the warning label on the product children have been using to exterminate these itchy critters for decades.

“What I couldn’t understand was why would you use a chemical treatment to treat something like head lice, which are no more than a social nuisance,” she says. “It really didn’t make sense to be applying poisonous chemicals on to your child’s head.”

With no formal qualifications in science, hitting the books in the local Margaret River library and testing out her natural alternative on volunteers from local schools and day-care centres, the product Quit Nits and her company Wild Child were born.

Her first year told her she was on a winner, taking 10 per cent of the then $30m market. Soon her product was in the nation’s top supermarkets and over 5000 Australian pharmacies.

Preston now has ridden a wave of consumer demand for clean, green and natural products and has really made an export splash by getting her Quit Nits into the UK’s Boots chemist shops worldwide.

And Wild Child is poised to break into the lucrative US market.

“Wild Child is being launched at the start of 2008 in the $US100m market with a planned market share of over 20 per cent by the end of our first year,” Preston says. “This will be driven by a $US5m per annum marketing campaign — our largest investment to date.”
 
She has also diversified into other products including sunscreen and baby healthcare products.

Meanwhile, Didier Elzinga’s Rising Sun Pictures has established itself as one of the world’s top post-production operations, putting the finishing touches on the likes of the final movie in the Lord of The Rings trilogy.

Equally impressive was Robert Phillpot’s Aconex, which is an Internet-based business designed to manage documents for the building industry.

All participants on the panel recognise the role Austrade had played to facilitate their export success. And while they’re all equipped for competition in a changing world — their records prove this — none have been thrown the curve ball that the VRC has to play.

Exporters’ tips:

•    Get the first-mover advantage
•    Make a call on your core business strength
•    Embrace risk as a motivator, not an inhibitor
•    Negotiate a robust deal
•    Be proud of Australia and back yourself
•    Pick a memorable trading name
•    Position your brand to build international awareness
•    Network to link with like-minded foreign experts
•    Value and protect your intellectual property
•    Take advantage of government assistance programs
•    Get great people and protect your skills base.

 

Published on: Thursday, June 18, 2009

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