Trade and investment is vital for Australia’s economy – our long-term prosperity depends on it.
The benefits that flow from the export sector are often taken for granted – and many of our international success stories are often overlooked.
It is vital for Governments to support businesses with the drive and nous to take their products and services to the world.
Late last year Australia’s trade balance returned to surplus for the first time in almost three years.
Bureau of Statistics figures show a trade surplus of $1.24 billion for November.
But we can’t afford to rest on our laurels. Every effort must be made to keep driving and growing our export sector.
One company that has been a shining light for Australian exporters is ANCA, a global leader in CNC tool grinding machines and technology. ANCA services a wide range of industries, including the aerospace, automotive, electronics, medical and woodworking sectors.
For 2015, the company achieved records for sales and production. In 2014-15, revenues were nearly $200 million – with nearly 99 percent of its sales from exports.
The advanced manufacturer has been recognised with a string of awards for its many achievements in the export sector.
ANCA was named Australian Exporter of the Year in 1995 and again in 2015 and last year became only the 11th company to be inducted into the prestigious Export Awards Hall of Fame.
The company was established in 1974 by Pat Boland and Pat McCluskey, who worked together at a government munitions factory.
The two Pats initially made just CNC control systems, but soon realised there was a limited market in Australia – so they decided to cast the net wider and chase export markets for machine tools.
The rest is history, as they say. Demand for these systems has soared and the company has grown from strength to strength.
“It was a niche area, recalls Pat Boland. “Australia was just too small. To succeed we had to compete on a global scale.
“So right from the early stages we were thinking of ourselves as having to be a global company.
“The first machine or control system we exported was to Japan.” Mr Boland says the company then moved its focus to the US followed by Europe, the UK and eventually China. Asia is now the biggest market closely followed by the US and Europe. Ironically, Germany, Switzerland and the US have long enjoyed a reputation as world leaders in machine tools, but ANCA has beaten them at their own game. “Our greatest achievement has been becoming a significant player in the machine tool field,” Mr Boland says modestly.
“We are recognised around the world as a significant player, particularly in area of CNC precision grinding machines. “We don’t just work with technology, we create technology.”
The company has certainly come a long way since its early days selling CNC control systems.
It now employs 400 staff at its Bayswater complex in Victoria (many of whom are engineers) and a further 500 personnel overseas.
ANCA manufactures in Germany, US, the UK and Taiwan. Just recently it opened a new state-of-the-art manufacturing facility in Thailand.
The company also has offices in Brazil, China, India, Japan and Mexico.
“Back in the 70s the tyranny of distance was probably the biggest challenge for exporters,” says Mr Boland.
“There was no Internet of course and we had to rely on fax machines. “It’s a lot easier now (for exporters) – the world is much smaller now with the rise of the
Internet and the cost of freight and airfares is more affordable.
“Everything is vastly less expensive than it was.”
Mr Boland says one of the keys to ANCA’s success has been its strong customer service.
“We created a business model in the United States where we wanted to appear like a local company – without losing our Australian identity.
“We offer full pre-sales and after sales support as good as any American company and this philosophy has worked.
“At the same time, we have never hidden the fact we are an Australian company.”
Mr Boland says the company uses the same model for its operations in Asia (particularly Japan and China) and throughout Europe.
Now is an “enormously opportunistic time” for Australian companies to explore overseas markets, he says.
The weaker Australian dollar, a relatively strong world economy and the signing of major new Free Trade Agreements mean the barriers to entry are much lower.
Mr Boland believes more Australian companies – particularly in advanced manufacturing – should look overseas.
“It’s much easier when you look at business from a global perspective,” he says.
In the global market place businesses can now specialise and find a niche to become far more competitive.
“When you compete on the global scene you have access to a much bigger audience.”
Mr Boland agrees exports are important to maintain a healthy Australian economy.
“Australia now imports most of its consumer goods and consumable items.
“When you go to store like Bunnings (hardware) you can see the number of products manufactured in Australia is very small.”
He cites the automotive industry as an example of the demise of labour intense manufacturing industries in Australia.
“We need a balanced economy with manufacturing, mining, agriculture and services all playing a part.”
Exports are a big driver of jobs and job creation – particularly higher paying jobs, he says.
And governments – both state and federal – should be doing more to encourage and assist Australian exporters.
“Rather than having blanket company tax reductions, it should be more targeted,” he suggests. For example, companies that invest in capital equipment should get accelerated depreciation.
And tax rates should be lowered for businesses who are trying to grow their businesses off-shore.
Mr Boland says state governments could also assist exporters by offering payroll tax exemptions.
He remains optimistic about his company’s global future. “All being well in the world economy, there is still room to grow.
“The past year we had 12 months of relatively slow business in China and that has now seemed to have changed.
“Also, the Korean and Japanese markets have been very strong and we are hopeful of more business in Indonesia and Vietnam.
“The US is still a strong market and Europe is stable.” Maintaining a global focus has helped ANCA remain competitive, says Mr Boland.
The company is the perfect example of what Australian manufacturers have to do to succeed on the world stage.
“ANCA is proof that an Australian company can successfully compete and prosper in a global market,” Mr Boland says.