Export Council of Australia Global Podcast

1. COVID-19 Series - Overview of Australia’s major trading regions, North America and Asia

April 22, 2020 Shane Styles Season 1 Episode 1
Export Council of Australia Global Podcast
1. COVID-19 Series - Overview of Australia’s major trading regions, North America and Asia
Chapters
Export Council of Australia Global Podcast
1. COVID-19 Series - Overview of Australia’s major trading regions, North America and Asia
Apr 22, 2020 Season 1 Episode 1
Shane Styles

Join Sarah and Shane from the ECA with special guests Chris Warry, PwC and Trena Blair, FD Global Connections as they give you an overview of the current impact of COVID-19 across Australia’s major trading regions, North America and Asia. The rest of the series we will take businesses on a journey that will help them to reassess their export strategy and then reposition their plan now and post COVID-19. 

To help your business achieve this, we will consider market position, supply chain, finance and compliance, and marketing strategies. We cover a range of successful case studies and businesses and then assess the opportunities post COVID-19.

Show Notes Transcript

Join Sarah and Shane from the ECA with special guests Chris Warry, PwC and Trena Blair, FD Global Connections as they give you an overview of the current impact of COVID-19 across Australia’s major trading regions, North America and Asia. The rest of the series we will take businesses on a journey that will help them to reassess their export strategy and then reposition their plan now and post COVID-19. 

To help your business achieve this, we will consider market position, supply chain, finance and compliance, and marketing strategies. We cover a range of successful case studies and businesses and then assess the opportunities post COVID-19.

Shane Styles:   0:01
way. Welcome to the Export Council of Australia. Global Podcast. The is the peak industry body and membership organisation and has been helping companies grow internationally for over 60 years. Thie supports this expansion through skills development, policy advocacy and breaking down barriers to trade. Hi,

Sarah Demenis:   0:26
everyone. Welcome. I'm Sarah to menace from the Export Council Australia. And today we lodge are the global podcast with a special Siris on covert 19. We've managed to do all of this working remotely. As we felt it was important to help and support the export community as we all navigate the new normal were challenged by the ever changing nature of covert 19 and unnecessary response to it both personally and within our businesses over the next few weeks will breathe, bringing you in sites and practical information that you can use in your business now and into the future. Everything will be available on our dedicated cove in 19 Web page www dot export dog. Don't you backslash Covad 19. I'd now like tio bring in tow. The discussion, My colleague Shane Styles from the Shane. Welcome. How are you?

Shane Styles:   1:29
Thank you, Sarah. It's great to be here. Getting used to being fully remote, a CZ when the challenges it has everybody else. How are you finding working from home?

Sarah Demenis:   1:41
Yeah, absolutely. It's been a spear rule sort of shell shock, and we've had to create a second working spaces. My husband's also from home, so I think it's sort of a CZ. We're just it's getting a bit easier. What are we going to be discussing in these episodes coming up and how we're going to be helping businesses?

Shane Styles:   2:01
The end of their first Siri's is focused on informing and offering solutions to businesses we want to bring in leaders from across the country that will give practical information. Andi here from business owners who are finding a path forward today in our first episode will get an overview of two of our major trading regions, North America and Asia and then over weeks ahead. We want to take businesses on journey that will help them to reassess their export strategy and then reposition their plan going forward. We will do this by looking at their market position. The supply chain. They're financing compliance strategies and then take a look at some successful case studies and then assess where the opportunities will be in a post covert 19 world.

Sarah Demenis:   2:48
Yeah, thanks, Shane. I think there is certainly a lot of challenges facing businesses at the moment, so it's going to be a world of very useful information for them. So before I introduce our guests, can you tell me a bit more about the business checklist that Isha has released on DH? The What businesses Khun Duo with it?

Shane Styles:   3:16
Sure, one of the things that we've been working on is trying to help businesses have a plane, eyes a launch, the checklist to allow them to just take a moment to breathe and reflect on their business and ensure that they are enacting some sort of new strategy in the coming weeks will launch a Blawg, a discussion forum on a dedicated online covert 19 training portal. These will further assist exporters, get a plane up skill and hopefully move forward through this ever changing world.

Sarah Demenis:   3:48
Yeah, we're absolutely here 100% to support and advise all of all of Australia's exporters. I like to now introduce, I guess Chris Worry from Peter, BC Australia is the director Asia Practise and Export Advisory and trainer Blair, who's the CEO from FT. Global Connexions. Welcome hearing the voices of your client's moment and how you reassuring them.

Chris Worry:   4:22
I guess the impacts obviously both wide spread. But but it's also be varied as well. Some of our clients, especially that a sort of China focus. This is not a new thing, and grappling with Corona virus has been on the radar basically since the middle of January. But I think from a purely export lanes the concerns of obviously, I guess, more immediately been around, really just trying to get it on, understanding the situation in the countries they do sell toe and a feel for the potential level of disruption for Australian businesses who are exporting their primary business or their primary market still still, And so they are absolutely grappling with what has just escalated significantly, obviously, that we're all going through in the past week and 1/2. We've got clients in from a very base of industry sectors, so it can be vary. But for food service, entertainment, those tourism education, those ones on the front line, it's light's keeping the lights on. Some sectors are food manufacturers and retailers. We do want to the large retails ITT's actually, almost the reverse is is how do we make the spike in the activity that we're that we're that we're finding terms of question around reassuring them? To be honest, I think the best assurance of rations that sort of being able to provide is essentially action, really, and support for them to react to their absolute pressing need to wear when we E. S. In my context, ABC has had capability to do that and look no surprise. They probably focus on two things. One, really. This notion ofthe cross, this response everyone's in that boat on any other armies is probably interesting concept as well as this. Sort of what you'd probably call just rapid business transformation. You know, having a change immediately and not having the usual process that businesses air used to around. You know, let's assess the opportunity. Let's do a bit of a review around what the impact will be. Let's set ourselves up a simple man. Let's pilot Baba Baba Baba. It's all know we have to change now, or else we're in real trouble, helping some businesses stand up. No crisis response centres and mobilising to rapid resources. We've been doing a bit of that over the last two weeks, including for our own businesses, mid market and smaller clients, our sort of financial based. So the sufferings have bean bean very busy around cash, cash management, working capital management, especially for those distress businesses that just made that Kate take a keeper flight. One thing that really propping up and and a lot of his sort of conversation based is really also then helping them identify a turning business models when you need to. Rapidly, I have a business model. It's often difficult to know who to turn to that can help you understand something.

Sarah Demenis:   7:14
Trainer. What are you hearing from your clients?

Trena Blair:   7:18
What I'm seeing and hearing in the conversations that I'm having is the businesses with strong balance streets that have already started to scale into the U. S. I have done this scenario planning their financial plan 369 12 months out, and they really assessing the impact of the moment, establishing reporting against those scenario plants have about the trigger points around the market entry and the activities that I'm being undertaken over their eyes. They're doing this scenario. Planning is well what they are doing is also modifying their extension. So if they don't feel they have the cash run rate, they're pulling back a little bit out of the market. But what they are doing is maintained a presence in that can look and feel in many different ways. Those companies, which are more early stage in exporting or launching into the U. S. On don't have such a really doubling down and what they're also doing is assessing their assets. So looking at the local market, looking at the assets they've got in their business and seeing where they can give it, as this mentioned, what are the new services that they can livre choosing those assets which has already existed in the business? And there are many examples that we all seeing the moment some amazing examples in terms of how my reassuring mind clients I'm running within us, and one of the most popular has been on managing business risks. And what I talk about is what businesses need to do in terms ofthe taking some control back. So at the moment everything is in gaols, our personal lives out, business lives, everything is in chaos. Normally, analyses normally only one aspect about us. It's in cast. It might be something happening in the family. It might be something happening business. We can get through that relatively easily, but at the moment everything is in chaos and what I'm exploring and working with my clients around if trying to get some control back in a measure within their business. So talk about five risks in the business that they need to be assessing, and then it'll be putting action plans against each of those on DH that gives a sense of being in control. So the business wrists are strategic risk. But actual risk operational risk in ploy risks on reputational risk, which is prophetically important at the moment they find, is really hoping businesses who don't have the normal capabilities off doing a broad risk assessment on their business. But again, it's very much around saying you have some control over this on DH. Let's look at that. Let's look at the mid against on. Let's look at the opportunities of doing a forensic assessment on your inputs and outputs and the assets to go with those and where can you pivot as well? And Shane, can you Please give

Sarah Demenis:   10:26
your insights that you've had from our members

Shane Styles:   10:30
Big focus from our members. Recently, the issues around freight logistics and shrinking air cargo capacity. The sea freight. A shortage of containers, particularly refrigerated containers and ships, leading to potential delays at this end in Australia and I was an increase in sea freight costs, also staying ahead of the border changes and mapping their supply chain to find where they are exposed for key components. One member was manufacturing and pulling from three different countries and had the goods 95% complete, but was missing that one key component. Another I spoke to in the mining street had key wiring components missing yet another. An integrated circuit board holed up at a factory and couldn't get them out. So I think what we're seeing and what we're talking teo members and others at the moment is that going forward mapping your supply chain again right down to your second and third tier types suppliers is going to be critical for your business and the focus going forward. Yeah, and I think on the key points that both trainer Aunt Chris speak about is having a rapid response and having a plane. You know, an understanding that we are in a time of crisis on many levels, and it's okay, Tio have a little bit of stress and anxiety around that, but it's not okay to stay there and that that's why we've put out the business checklists and other documents just to get people thinking more clearly about business Things

Sarah Demenis:   12:03
start with U using a notable increase in either e commerce, business diversification or both.

Trena Blair:   12:12
Yeah, absolutely. Both in the US There's a major major focus onto hell your health on DH. There's the new legislation house that federal level for telly health providers now having access to medical care rebates but also critically for Australian businesses. In this space, where once you were only able to operate on licence in one state and in another state, you have to get licences in. Now the federal legislation allows you to register, and one say that you can operate nationally, so that's a really possible positive benefit for any business that is in the tele health space. In terms of business diversification, like Australia, we are seeing many companies hit it again, looking at their assets shortly, utilised with the X as it's creating new business models on DH one. Great, in fact, Australian example. If I can share that, it's a whole global. So it's an interpreting business and has been established for many years. And they were working with governments are doing to trade missions into China. They're working with governments all over the world, businesses all over the world. Well, border stopped. Mission stopped. So what they've done is through the existing network into China. They've got a lot off medical supply science, and so they know what they're doing is creating a network to access all of those medical supplies out of China. So they're going into Not only Australian hospitals are able to procure. Those medicals eyes are also going into the U. S. And London and all other markets around the world where we're seeing riel lack of supplies for our medical health workers. So it's a really great example where the business is just done. This amazing here, but never thought they would be procuring companies out of China on medical supplies. But I think it's just another great example of looking at your assets and figuring out ways to be innovative. And

Sarah Demenis:   14:32
Trina, I'm absolutely inspired by some of the business diversification that I'm seeing of. They've got the local gin distillery down the road who is now making hand sanitizer just to name a few of these businesses that are really bringing out something different. Chris, over to you. Can you share what you've been seeing with your clients in regards to an increase in e commerce and business diversification?

Chris Worry:   15:01
If I pick up a couple of things from China and for those that absolute well versed in that China market, this won't be a surprise that a lot of inside's been coming out around this. But obviously, through their lock down period, there was a significant shift shift. Teo Commerce and online spending. You know, 20% circuits with a 20% increase in online spending and things like stats like 40% of people already online increased, increased their activity. And from a perspective of China, is actually probably the interesting things are probably more the demographic shift. So, you know that's an increase in older generation take up of take up of e commerce. Older generations that have typically used markets are now going online to sort of fresh produce. So for Shiner as well, given their on this is this is similar across Asia. You know, Social Commerce is plays a much bigger role than it does say in Australia, and so there are a lot more socially connected. So So it wasn't just it wasn't just a commerce were, you know, it's actually the other interesting points around the around social commerce. So way saw a lot of people in China during their lock down, jumping on gaming and obviously short video platforms on DSO. What we should have found there is that that that obviously feel even Maury commerce trade because very influenced based on DH. Plenty of businesses where are individuals were targeting social commerce influences that could drive awareness of their product while people were locked down.

Sarah Demenis:   16:40
And trainer? Where do you think are North America's standards on the recovery journey? And what should businesses be preparing for?

Trena Blair:   16:47
It's interesting to look at the timeline in the US because I think that is going to determine where they are and where they're going to end up. So in the US, the very first haste that was identified was generated 21st we still haven't hit maximum peak in the US The way I like to think about it is an iceberg. We can see what's happening on the surface. We don't hope it 19 exists and we can see the impact. We have no idea what some Danny. So what's your business? Is the preparing for keep an eye on the US market, keeping contact with people on the ground over there, keeping contact with non networks? Supportive. So one of the things which I think we should take comfort from is thiss. Americans are very good at working from home. It's seen a standard practise and policy for many companies in the US for many, many years. So certainly when I moved over there in 2007 there was smoke from the home policies. So don't be discouraged by what's happening in Australia, where we're seeing lots of companies scrambling to put in place work from the home policies and practises and going online to figure out what does work from home Maine and how should we be trapping productivity and all those important things, So the US is very good at it, So if you don't have people on the ground. You do have an office in the U. S. And you're now happen to move them into a work from home environment. Take comfort that that's actually quite standard for them. So continuing tio two energon it work over there habia brand to hop in mind. So you really should be thinking about your brand in ways that you can get in front of your clients or prospects. Already another appointment about the US I do want to make this this and this is a rant. Stabilising is a chain which shame touched on a little bit earlier. So I mentioned that we need to ensure businesses in Australia to a forensic assessment off the supply chain. All inputs and outputs in the U. S. Heart of this super pie chains are cracking under pressure. So particularly covert. 19 is ah, highlighting this Chris off just in time supply right supply chains and they run on very, very thin margins. In fact, in the US, it's been reported that 75 I'm going to read my notes here. 75% of U. S. Companies surveyed report over 19 related destructions as off early March on DH 44% didn't have a plan ready to respond. So what that means if there are businesses that are already exporting into the US and UK distributors, another supply elements in the U. S. Relying on them, you've got to make sure that they have prevents in place to be able to manage those effectively. What I would also advise is you need to be doing research on other partners in the market. You need to be doing that now because there is no guarantee that any of your existing supplies, distributors and so forth in the US are going to be able to survive to the end of this. If you have those plans in place now that it's going to be easier for you. So then make those introductions and the build out those partnerships. So your supply chain risk, I think, is one of the most important things that you need to be looking at. If there are businesses that are currently exporting or they got what they got staff in their states staying eight within very closely and make sure you're happy. Backup plans in place as well.

Sarah Demenis:   20:38
Thanks, trainer, for your very comprehensive response especially about looking for partners, is important for all parts of exporting journeys. Following on from this. What opportunities do you see for businesses in North America over the remainder of the year?

Trena Blair:   20:54
Yeah, I do. And I'm seeing that with Clients seem to be slowly aside, industries on seeing it in food and beverage as well on DH. So there are industries in which there are opportunities on DH. Each sustaining company, which is looking to North America, just needs to make sure that they've got their strategy to clear on. They put in the risk militants in the event that things don't happen. But as I say, they're very accustomed to working from home, all the banks over there there mostly working from home. They've been doing this three years. It's just another day in the life of them working. So we're still having calls with the global banks around potential opportunities or Finn ticks. Still having calls for potential opportunities for food beverage on DH health. Teo, this well, as I mentioned telcos is another area where businesses air beginning to really focus on so so you. There's definitely opportunity that how we do that is different it's no longer getting on a plane and flying over and having those face to face. So what? Businesses have to think that that is how to do it differently? Chris,

Sarah Demenis:   22:16
what do you see as the opportunities in Asia going forward around seconds? Industries

Chris Worry:   22:24
e think in terms of the sectors, I don't necessarily see a significant shift in the sectors of demand. So for the first passes, really around around really staying close to which markets that you are in or looking at Do you think there is a need? Teo, focus on the immediate term so that you're ready when they when they do switch on S O B to B Mark and I think was starting to really get a bit mohr traction, especially in countries like China. I think that'll brand pop now, so you know, affairs and getting on a plane is sort of coming down. But, you know, we're seeing some good examples of businesses. You using social commerce, marketing Maurin a B to B context, not just a B to C. So So I would I would encourage businesses say specifically, for example, in China that are in categories where probably ramp up Tito. Start exploring now baby marketing opportunities to further try and find new customers. If I think China specifically for the businesses that are in shelf, stable food and beverage that is tied to the supermarket trade, they are going to see around properly quickly. And it's a case of making sure that you are ready to turn the tap on when order start happening, which we're seeing them happen now. There's going to be a bit of infantry toe work through both from from that perspective. But Australian business need toe really start thinking about when that turns on and I'm going to be out of supply and that he's a bit of an unknown at the moment. We don't know what restrictions business might have heaped on them in the next few weeks, but that that's a key that is a key consideration. And then, you know, those restaurants will come back that food service industry will come back. So for those industries that got absolutely smashed from a China perspective barely on like wine beef that was tied to food service seafood in particular starting to really think now about those processes they sort of backed off on in terms of cultivating potentially our esteem. Those orders will come on pretty soon. So fine up

Sarah Demenis:   24:35
here. Teo, can you share any advice or action that you've can give Tio export businesses at this time?

Trena Blair:   24:49
Yeah, I got tio. Understand the risks in your business and do that in statement. It's what might really important that you get a good understanding of that and the mid chickens against each of those list number two is considered too engaged within that work with you to engage contacts in the US If you've got a team over there, communication is more important than ever with them on DH. Early is around your brand, so maintain that brand presence will have to do more now than what we would normally have. Particularly we've had to cut back on stuff you do need Teo meant. Manage your reputation manager brand and really position it.

Sarah Demenis:   25:33
Chris, have you got some top tips for export? Business is a CZ. Well,

Chris Worry:   25:37
I suspect most business almost passes, but just quickly, quickly pulling together a basically a fact based on fact pack in one place of the critical information on each of your markets. Anneli Big One, which has been talked about it. But try and really get to the heart of this stock level 33 year global supply chain. A lot wait visibility to that. But try as best you can get that on the Raiders won. The key bit of information you need very quickly is where your stock years across that across that network is that will be critical in your ability to Rear

Sarah Demenis:   26:12
and Shane. Do you have any additional bits of advice or important information that people can go away with today?

Shane Styles:   26:21
Firstly, you know the lay of the land is going to continue to change. You've got to stay informed and ensure where it's possible is we have heard that information's coming from on the ground Contacts. Secondly, continue to reveal your plane, reassess and reposition. And thirdly, where are your opportunities? Your local and your global competitors are all going through the same issues that you're trying to overcome, and due to the nature of his virus on the different times and stages in each country, supply chains and not all affected equally. So how do you stay on top of those opportunities as they present themselves as each of the markets come back on line.

Sarah Demenis:   27:02
So I want to say a big special thank you to Christian Gerena for joining us today. Thinking insights have bean invaluable and hopefully a lot exporters and businesses and people looking to export can and Khun Takeaway as really useful tools. So thank you both once again.

Chris Worry:   27:26
Thanks, I think Shane and take care everyone.

Sarah Demenis:   27:29
Shane, can I just get you to summarise the most valuable and top tips to take away from this podcaster? I think again

Shane Styles:   27:37
we have to understand that this is widespread and varied, and a one size fits all approach will just not work. To reach business, we need to respond quickly to pivot our business models to stay ahead of the challenges we're facing. And this is going to take clear thinking and a lot of strategic planning work to understand a stabiliser supply chain and ensure you are mapping a ll the different levels of your supply chain. Be patient with your different markets and with your partners there on the ground, each country will require a different strategy to see your business through. And finally, whilst it's hard to think about that now we'll look for the opportunities they are there now and post covert 19.

Trena Blair:   28:22
Thank you for

Sarah Demenis:   28:23
listening to our first podcast next week. We'll look at reassessing and repositioning your export business plan. I'd like to say a big thank you to Gavin from tenacious studios for pulling this podcast together. If you'd like to contact the please send us an email info export dot org's don't you? Otherwise, we'll see you all next week.

Shane Styles:   28:50
Thank you for listening to the Export Council of Australia Global Podcast. For more information, please visit us at www dot export dot or GE, don't you?