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Australia as a market

Please find information about chosen industries in Australia with relevance for particular Danish companies

The Danish Trade Council in Australia might be your company’s way into the Australian market. There are different options and ways that we can assist your company. We are also happy to discuss your needs and thoughts and how we can assist your company in making the best connection to Australia and the market within.

Find the information in the drop-down list below. Please contact us should you have any enquiries or questions.

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Energy & Environment

Danish expertise is relevant in a sector where there is an increasing demand of urban development projects and increasing need for more efficient and environmentally friendly infrastructure and design. “The Australian National Strategy on Energy Efficiency” targets several key areas, in particular 'Making Buildings More Efficient'. The Council of Australia Governments has agreed to several measures under the strategy, including increasing the stringency of energy efficiency requirements for buildings, introducing mandatory disclosure for buildings and reforming the current rating and assessment processes for building energy efficiency standards.   

The Australian Government is also increasing its focus on renewable energy, mainly wind and solar power. The Renewable Energy Target (RET) was introduced in 2001 to ensure that 20% of Australia’s electricity comes from renewable sources by 2020. Currently, renewable energy sources make up 14% of Australia’s electricity production. The remaining 86% is generated from fuels types, with 73% from coal and 13% from natural gas.  On May 18 2015 the Federal Government struck a bipartisan deal to remove a two-yearly review of the RET that has strengthened investor confidence and projects in Australia’s renewable energy sector. $100billion is expected to be invested into Australian energy sector over the period to 2050.

Solar Power: The combination of Australia's dry climate and latitude give it a high potential for solar energy production. In 2014 solar energy remains largely underdeveloped in Australia representing only 1.1% of the nation’s electrical energy production. The move towards a greater focus on solar energy is being encouraged by incentives including rebates, feed-in tariffs, Australia’s Mandatory Renewable Energy Target and subsidy funding.

Wind Power: Wind-based generation has been adopted by Australia as the lowest cost technology to meet its Mandatory Renewable Energy Target by 2020. At the beginning of 2014, wind energy supplied 4% of Australia’s overall electrical energy production and Australia had 1639 wind turbines spread across 68 wind farms. South Australia, Tasmania and Victoria are the states where the majority of wind farm construction has taken place (currently accounting for three-quarters of the installed wind generation capacity in Australia). Wind farm construction encounters a high level of regulation in Australia due to concerns over possible negative health impacts that wind farm noise can cause, along with substantial declines in the value of land situated close to wind farms. The strength of Australia’s wind resources and the potential for growth in this sector provides Danish companies with opportunities to deploy technology and expertise in the Australian wind market.

Water: Australia has a unique water challenge. Australia is recognised as the world’s driest inhabited continent; with access to just over one per cent of global freshwater resources, and one of the highest per capita usage rates in the world. Increasing variability in extreme climate conditions has required governments, industry and citizens to prioritise water management. This focus has led to distinctive approaches, changes in governance, behavioural change and technology innovation. The increasing population growth in the cities of Australia puts restraints on the supply of water and its quality. Therefore, Danish companies can use their strong international position within water treatment and resource optimisation. The Australian Government is focusing on creating water security in all over Australia and under The National Plan for Water Security agreed in 2007 a long term focus and funding was secured.  

Waste: Australia is the second highest producer of waste per person in the world at approximately 650 kilograms per person. In 2011 the Australian government agreed on “The National Waste Policy” that reports on Australia’s progress on Waste management and resource recovery. The policy aims are to reduce the amount of waste for disposal, manage waste as a resource, ensure that waste treatment, disposal, recovery and re-use is undertaken in a safe, scientific and environmentally sound manner. The benefits of the policy are expected to contribute to Australia’s reduction in greenhouse gas emissions, energy conservation and production and the productivity of the land. A concrete priority area initiated to achieve the above is to improve the market, which includes using local technologies but sourcing innovation internationally. In 2009-10, private and public trading sector waste management businesses received $8.6 billion in income. The total cost of waste services to business in Australia is estimated as $2.2 billion per year of which $1.4 billion is spent on landfill.

Food & Agriculture

Australia is a major agricultural producer and exporter. Throughout history Australia’s agricultural industry been one of the key drivers of the nation’s economic development. Australia has a reputation for providing high-quality, safe and nutritious food, and holds a strong international position as a food producing nation. The food industry in Australia ranges from farm and fisheries production to food and beverage. Agriculture and its closely related sectors earn $155 billion-a-year for a 12% share of Australia’s GDP.

The majority of food sold domestically in Australia is grown and supplied by Australian farmers (almost 93 percent). There are approximately 135,000 farm businesses in Australia, covering 61% of Australia’s landmass, 99 percent of which are family owned and operated. As of 2010-11, there are 307,000 people employed in Australian agriculture. The complete agricultural supply chain, including the affiliated food and fibre industries, provide over 1.6 million jobs to the Australian economy.

Overall, the Australian food market is highly competitive. Food retailers and foodservice providers continue to respond to long-term shifts in consumer trends influenced by changing household demographics, lifestyle preferences, personal aspirations and technology. Two major grocery chains – Woolworths and Coles - dominate the Australian food retail market with 80% share of an industry valued at A$80+ billion. While the retail food market is concentrated in the grocery retail channel, a significant share of food spending is won by independent fresh food specialists and the large number of takeaway, eating-out and other foodservice establishments. It is estimated that Australia has over 10,000 small and independent retailers.

Even though the agricultural sector has proven resilient, Australia is a land of climatic extremes (drought, floods, storms and bushfires) and that brings numerous challenges to the farm production. In response to these challenges the sector has innovated and developed methods of production, which often has put Australia at the forefront of world agricultural development. Australia is also an ethnically and culturally diverse population providing an ideal test market for new food concepts.

Consumer Goods

Australia’s consumer goods industry is characterized by a dispersion of large and small retailers, who purchase stock from domestic or international suppliers, which are either manufacturers or wholesalers. This merchandise is then sold via stores to the public. The urban areas on the Southeastern coast of Australia (Sydney, Melbourne, Brisbane, Newcastle) are the most promising regions for consumer goods due to the large concentration of Australia’s population in these main cities.

In recent years, traditional ‘bricks and mortars’ retailers have also faced increasing competition from online players that stock similar items at competitive prices. Overall, Australian consumers are also becoming increasingly comfortable with electronic transactions with digital t. The retailers that have been most affected by the flood of online stores include those operating in the clothing, footwear, accessories, cosmetics, entertainment media and printed material industries.

Product quality, unique design and country of origin have all featured prominently as a means for retailers to differentiate themselves in the market. Australian-made goods are often been highlighted for their durability, ability to meet product standards and overall benefit to the local manufacturing industry. Amongst imported products, Denmark has a very good reputation with Australian’s who typically associate Scandinavian products with good quality, safety and style.

Fashion & Design:

In general, European design is very successful in Australia. Especially the Scandinavian design and fashion perform very well as the characteristic minimalistic and simple layouts appeal well to the Australian consumers.  In the 1960s and 1970s especially, Australian fashion manufacturers and designers tended to use the work of local textile designers rather than sourcing their materials from overseas or large textile manufacturers. During this time Australian textiles and fabrics cut a credible swathe in the European and east coast USA markets. In the 1980s, major Australian fashion designers put Indigenous textiles on the map.

Australian designers, by their very nature, look for simple and elegant solutions for challenges in often ordinary situations, balancing creativity with cost-effectiveness and innovative construction. The Australian lifestyle is reflected in the freshness and originality of the colours, materials and design.

Australian fashion tends to be relaxed and playful, thanks to the country’s warm climate, outdoor lifestyle and diverse cultural and historical influences. Australian designers also have a reputation for breaking conventions. It was at a Melbourne racetrack that English model Jean Shrimpton first wowed the world with the mini-skirt in 1965.

Cosmetics and toiletries:

Australia’s harsh environment means cosmetic products have to contend with varying climatic conditions, such as intense sun exposure and extreme humidity. As a result, sun protection and sunless tanning products that adhere to Australia’s stringent standards and offer anti-ageing properties do well in the market.

Recent years have seen growing demand levels in Australia for natural products containing vitamins and minerals and consequently there is strong domestic interest in natural skincare products. Key growth areas for natural products includes hair products, men's grooming products, baby products, dermatological products, aromatherapy, natural products and sun care.

Health & Pharmaceuticals

The Australian health and pharmacy industry is characterised by using leading technology, innovation, high professional skills, advanced research and development. In general, Australia has a robust healthcare system, and over the past decade, the industry has grown dramatically in size and reputation.

The key growth areas in the Australian health industry are:

·          Medical and surgical equipment and devices

·          Health IT

·          Health infrastructure and services

·          Clinical trials

The medical industry is characterised by approximately 20% global multinational companies and 80% small and medium-sized enterprises.

Aged Care Sector
There is a increasing demand in Australia for products, services and staff for the aged care sector due to:

·         Australia’s rapidly ageing population
In 2013, 14% of Australia’s population (3.3 million people) were aged 65 and over and 1.9% were aged 85 and over (439,600). By 2053, it is predicted that 21% of the population will be aged 65 and over (8.3 million people) and 4.2% aged 85 and over (1.6 million people). In general, Australia’s ageing population is wealthy and is willing to pay for more effective healthcare solutions. Baby boomers account for 25% of Australia’s population, and represent 55% of national wealth.

·         A gap between the ability of what the government is able to fund and public need
There are two basic forms of federal government funded aged care in Australia: Residential Aged Care Services & Home Care Packages. In addition, retirement villages provide independent living options for older Australians. The latter are managed and run by private companies, government bodies and charitable institutions. It is expected that there will be a shortfall of 66,000 home care places by 2050 and 83,000 new nursing home places will be needed over the next nine years.

·         Growing demand for an aged care workforce
Australia’s aged services workforce of 350,000 in 2014 will need to triple by 2050 to serve the increasing demand for care. The majority of aged care workers are over 45 with a third nearing retirement.

·         Expected increase in government spending for aged care
Dementia related healthcare is a particular concern for the Australian government with an expected rise in cost from $4.9 billion in 2010 to $83 billion by 2060. There is also a predicted shortage of 150,000 carers for dementia patients by 2029.

Construction & Infrastructure

The construction industry is the 4th largest contributor to GDP in the Australian economy and plays a major role in determining economic growth. The main growth areas of Australia’s infrastructure has historically  been influenced by the resources and mining sectors, economic stimulus spending by the Australian Government and reconstruction work associated with natural disasters (flooding, bush fires etc.).

Building and construction activity is undertaken by both the private and public sectors in Australia. The private sector is engaged in all categories of building and construction, and plays a major role in residential, engineering, architectural and other construction activity. The public sector also plays a key role in initiating and undertaking engineering construction activity, and building activity relating to health and education. Construction in Australia is primarily focused on the domestic market and is extremely fragmented with around 200,000 businesses, which represents 20% of the total number of companies in Australia.

Overall, sustainable building solutions are not yet highly developed in Australia. However, rising cost of energy and significant population growth forecasted over the next decades, combined with the demands of the people and the outside world for a greener focus, Australia has a need for solutions for sustainable construction, prefabricated houses, better water quality and materials for low energy buildings.

Mining

The mining industry has been a key financial driver in Australia over the last decade, including through the global financial crisis. Australia’s mining boom was largely driven by unprecedented demand for mining commodities such as steel and iron ore from developing countries such as China and India that industrialised rapidly over the last decade. Today, Australia has mining activity in all of its states and territories. In recent years, the Australian minerals industry has accounted directly for up to 8% of the nation’s GDP (significantly more when account is taken of related activity), upwards of 20 per cent of business investment and around 50 per cent of national exports.

Currently, the industry is changing from an investment phase to an output phase where mining operators are looking for product optimization and smart solutions to enhance productivity and where maintenance of existing facilities is now the focus . On top of this, the industry's other main customer, the Construction division, is now gradually recovering following a cyclical downturn in the wake of the global financial crisis. These new focus areas open up opportunities for a range of Danish suppliers and sub-suppliers who can provide smart and cost-efficient products and solutions.

Oil & Gas

By 2018 it is expected that Australia will overtake Qatar as the largest Liquid Natural Gas (LNG) producer in the world. In recent years, more than $250 billion has already been invested in the Australian LNG industry and the construction phase has peaked, with 13 new LNG trains within seven new plants to come online between 2015 and 2018. Australia’s LNG industry’s total capital investment and operating expenses are expected to reach about $360 billion by 2020 and will likely contribute $55 billion to Australia’s GDP in 2020.

According to a report commissioned by the Australian Petroleum Production and Exploration Association, Australia’s Oil & Gas industries are on the brink of a major transition and needs greater collaboration and innovative technologies to streamline production. Highlighted in the report is the need for more innovation and sharing of infrastructure, in particular around warehouses, pipelines and supply vessels creating opportunities for Danish companies operating in this sector.

Natural gas production is also expected to rise by more than 90%, the number of wells in production will increase by 400% and pipeline infrastructure will increase by 45% in the next five years from 2015.

Other industries

Information & Communication Technology (ICT): A significant research infrastructure, highly skilled and experienced workforce, and technology-hungry, solutions-driven customer base makes Australia a strategic location for a range of ICT activities with a global and regional focus. Australia’s ICT market is worth nearly A$100 billion. It is the fifth largest in the Asia-Pacific region, and the 14th largest in the world. There are many examples of world recognised brands taking advantage of what Australia has to offer in ICT. Global names such as Avaya, Canon and IBM have built global research and product development (R&D) facilities in Australia; Google Maps and Warner Bros have used their bases in Australia to develop profitable international digital content for business and entertainment sectors; Alcatel-Lucent, Cisco Systems and CSC run advanced technical assistance centres for operations around the world from Australia; and Logica CMG, Reuters and Infosys have made Australia central to their global risk reduction strategies.

Defence: The sector includes the Australian industries that are involved in supplying the Australian Defence Force.
This includes shipbuilding, aerospace, automotive, chemicals, electrical and electronic equipment, other fabricated metal products and machinery and equipment as well as service providers who provide garrison support and other services under the Defence Commercial Support Program.
The largest ten companies in the industry generated a defence-related turnover of over $3 billion. Most of these companies are prime contractors for the supply of defence capital equipment but service providers constitute a large and growing minority in Australia. 

 

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