#Australian firms urged to broaden Asia focus beyond China

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Opportunities in Malaysia are just as significant for many Australia food producers as those in China, according to Bonkers Retail, which on Monday announced a deal to distribute products in around 350 supermarkets across Malaysia through organic baby foods maker subsidiary Baby Royale.
“I think the focus for food is shifting beyond the China centric view of Asia,” Bonkers Retail managing director Adam Moore said. “[The food and agribusiness] sector has done some really good work in China, but the opportunities here are just as significant.
The federal government’s National Food Plan, released on May 25, projects demand for agrifood products in Asia will double from 2007 to 2050, with China accounting for half the increase in consumption.
But Malaysia, which saw GDP growth of 7.5 per cent in 2012, has the attraction of fewer language and cultural barriers, support from a government with aggressive economic development targets, and the Malaysia-Australia Free Trade Agreement (MAFTA), which from January 1 removed majority of tarrifs on Australian agrifood exports to Malaysia.
“Malaysia’s a dream,” Victorian Agribusiness Council executive officer Bronwyn Debenham said. “Especially because of the free trade agreement. In Indonesia it might take six or 12 months just to gain the certification for your product that allows you to distribute it in the market.”
Baby Royale expects the deal will net $A2 million worth of exports in the first 12 months, increasing to more than $A20 million over five years across the Association of Southeast Asia Nations (ASEAN) region, at which point it hopes the region will contribute half of the company’s revenue.
Meanwhile, MAFTA will continue to increase opportunities for Australian producers, with Victoria – which produces half Australia’s agribusiness output in three per cent of the country’s land mass – poised to benefit the most of any state, according to Victorian Minister for Agriculture and Food Security David Walsh.
Mr Walsh, speaking at the Victorian government’s trade mission to Asia – the largest ever from Australia to Southeast Asia – said milk products were especially marketable.
“For the dairy industry, domestic Malaysian demand for dairy products is growing at 10-15 per cent a year, while the country only supplies five per cent of that demand itself,» he said.
But Baby Royale, which spent two years in Australia preparing for its jump into the region, followed by a further 12 months in Malaysia gathering local intelligence and developing a targeted product range in conjuction with local market expansion services group DKSH Malaysia Sdn Bhd, says a tailored brand and local product offering is critical.
“These markets have evolved now, it’s more than ‘This product works really well in Australia, we’d like to sell some excess stock in Malaysia’,” Mr Moore said.
“That doesn’t work any more – you’ve got to invest in the local scene and understand it. For us, that’s where the clean, green positioning is really important.  That’s what consumers in this segment expect.”
Australia has the advantage of a reputation for clean food produce in the ASEAN region, which has been dogged by food safety debacles including China’s 2008 milk scandal, which saw six infants lethally poisoned and an estimated 300,000 taken ill after consuming milk formula products tainted with melamine.
Business Spectator travelled to Malaysia with the assistance of the Victorian Employer’s Chamber of Commerce and Industry.
 
Source: Businness Spectator

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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