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Presentation: Investment

Ken Smith - Agent-General for Queensland

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Presentation: Investment

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    1. Presentation: Investment

    3. FDI Trends 2010- Top 10 Stock of FDI in Australia % change 2005 - 2010 USA A$120B 58.9% UK A$53B 0% Japan A$49B 130.9% Netherlands A$31B 45.7% Switzerland A$21B 75.4% Singapore A$20B 381.8% Canada A$16B 169.8% Germany A$16B 66.3% China(PRC) A$13B N/A France A$13B 32.7% Source-Australian Trade Commission, rounded to nearest billion total FDI in 2010 A$474billion

    4. Total foreign investment & Trends In 2010, Top 10 Total Foreign Investment in Australia % change 2005 – 2010 USA A$550B 64.6% UK A$473B 57.7% Japan A$118B 130.5% Singapore A$44B 122.6% Netherlands A$42B 47.8% Hong Kong A$41B 29.2% Germany A$41B 93.5% Switzerland A$41B 104.2% New Zealand A$34B 23.9% France A$24B 46.1% Source-Australian Trade Commission, rounded to nearest billion total FDI in 2010 A$1.968 trillion

    5. IMF Statistics on GDP Of the top 20 richest countries in the world (CIA world fact book) eight are in the TIQ Europe region Billion US$ 5. Germany $2,940 6. Russia $2,223 7 United Kingdom $2,173 9. France $2,145 10. Italy $1,774 13. Spain $1,369 16. Turkey $960.6 20. Poland $721.3 In fact, European Union is ranked first ahead of US(2), China (3) and Japan (4). Source: CIA World Fact Book GDP (Purchasing Power Priority) January 2011

    6. Europe still a force to be reckoned with: The 27 members of the EU as a bloc are Australia's largest foreign investor At the end of 2010- EU FDI to Australia totalled $131.6B (approx 28% of Australia’s FDI) As per previous slides, FDI dominated by UK (40%), Netherlands (24%), Germany (12%) & France (10%) In addition, Switzerland accounted for $20.7B in FDI and the Russian Federation $222m In total region accounts for about one third of all FDI.

    7. A force to be reckoned with (cont.) A 2009 survey by the European Commission delegation in Australia found that; Approximately 2,400 EU companies have a presence in Australia Estimated tunover of almost $270 Billion Directly created an estimated 50,000 jobs and up to 940,000 jobs with multiplier effect Major areas of activity: Manufacturing Finance and Insurance Construction Mining Wholesale trade

    8. Our Strategy Forward strategy for IA In UK working with UKTI’s 9 regions to promote inward investment in priority sectors (eg. East Midlands, North West, South West, Yorkshire) In UK in conjunction with Austrade and other states regular ‘Doing Business in Australia’ London and regional events. Australia Unlimited sector events in the Gas Sector (November 2011) and infrastructure (February/March 2012) Focused involvement in major international exhibitions including Paris & Farnborough Air Shows, Bio-Europe, Medica, Mines & Money, DSEi In Western Europe focussed discussions at a regional level within country is key, eg. Lyon(France)- Pharma, biotech, Toulouse (France)- aerospace, defence, Eastern Midlands (UK) infrastructure, rail Cont…..

    9. Investor aftercare - to encourage re-investment with sector targets, in specific regions, for example; France: aviation, constriction, renewables, pharma, transport Spain: construction, renewables, infrastructure Germany and German speaking countries & Switzerland: pharma, biotech, advanced manufacturing Nordic countries: renewables, gas supply chain, advanced manafacturing Build on trade links and investigate long term opportunities for Investment attraction from emerging markets for example Turkey, Eastern Europe, Russia and CIS

    10. The changing Landscape, Emerging Markets to Watch

    11. My contact details: ken.smith@trade.qld.gov.au

    14. History of Japanese investments

    19. Japanese Investment in Australia in late 80s’ Late 80s = MFP (Multi Function Polis) as a symbol Union/IR problem Seen as holiday resort or source of natural resources = not seen as a business investment destination Small population = not attractive as “market” Japan Inc. was still US centric High current account deficit High risk market – credit rating Relatively unsophisticated investment strategy Local community backlash

    20. Japanese Investment in Australia - Now Perception of low political risk Strong A$ (particularly since GFC) Energy/food sectors well known but new sectors (high tech, service) not well known Small market BUT growing/young/affluent population (Japan Inc. strategy changed from a market share driven to shareholder capitalism) Focus on the Asia Pacific Emerging markets on the rise

    24. Now I would like to talk about Mos Food’s investment in Queensland. This is a classic example of cross over, with inward investment, export and domestic sales. Mos Burger will initially open a store at Sunnybank Plaza and a head office in Brisbane in April. Ultimate goal of establishing 30 stores in QLD. They plan to open an additional 70 stores in Australia. The employment for QLD alone is expected to be over 600 jobs The operation will be wholly owned and operated by Mos and is worth $52 million investment. Mos will be purchasing ingredients from QLD local suppliers and ultimately exporting to their 300 stores being operated in Asia including Japan. QLD suppliers will gain know-how to meet the global standard.Now I would like to talk about Mos Food’s investment in Queensland. This is a classic example of cross over, with inward investment, export and domestic sales. Mos Burger will initially open a store at Sunnybank Plaza and a head office in Brisbane in April. Ultimate goal of establishing 30 stores in QLD. They plan to open an additional 70 stores in Australia. The employment for QLD alone is expected to be over 600 jobs The operation will be wholly owned and operated by Mos and is worth $52 million investment. Mos will be purchasing ingredients from QLD local suppliers and ultimately exporting to their 300 stores being operated in Asia including Japan. QLD suppliers will gain know-how to meet the global standard.

    25. Now, I would like to explain how this deal was achieved. First of all, I met with one of their directors at AJBCC in Tokyo in June 2009. They have been importing beef from Australia but I realized that the director was thinking of investing in western countries. During the 2009, we provided him with basic facts about Queensland and advantages of moving to Queensland. Mos was looking for a JV partner in Australia. Coincidentally Eagle Boys Pizza was looking for a JV partner in Japan, and we introduced each other. Unfortunately they could not come to a mutual agreement. But we continued providing them with market entry strategy and market advice. Brisbane Marketing has also introduced them a couple of local JV partners but none has worked out well.. They first visited Brisbane in early 2010. Food and Beverage team, North Asia team and we introduced to many suppliers in Qld. Finally they found a suitable JV partner committed to invest in Queensland, a Qld based Taiwanese company. 18 months of ongoing support has been paid off ! Treasurer met their President recently.Now, I would like to explain how this deal was achieved. First of all, I met with one of their directors at AJBCC in Tokyo in June 2009. They have been importing beef from Australia but I realized that the director was thinking of investing in western countries. During the 2009, we provided him with basic facts about Queensland and advantages of moving to Queensland. Mos was looking for a JV partner in Australia. Coincidentally Eagle Boys Pizza was looking for a JV partner in Japan, and we introduced each other. Unfortunately they could not come to a mutual agreement. But we continued providing them with market entry strategy and market advice. Brisbane Marketing has also introduced them a couple of local JV partners but none has worked out well.. They first visited Brisbane in early 2010. Food and Beverage team, North Asia team and we introduced to many suppliers in Qld. Finally they found a suitable JV partner committed to invest in Queensland, a Qld based Taiwanese company. 18 months of ongoing support has been paid off ! Treasurer met their President recently.

    26. Current involvement of Japanese companies in CSG development in Queensland

    31. How to service Japanese investors

    32. Queensland visit by JGC Chairman Emeritus – August 2011 Trade and Investment Queensland secured JGC’s speaking engagement at Alternative Fuels Summit 2011 Japan’s LNG “Big Three” along with Chiyoda and Toyo Engineering One of the four largest specialists in LNG projects worldwide

    33. How to service Japanese investors

    34. - Resources/Energy (coal, CSG/LNG, minerals/rare earth, infrastructure) - Food and agribusiness (including franchise)

    35. The most striking difference from typical inward investment deals is the availability of Japan’s public money, and this government’s willingness to push domestic companies be competitive overseas is the window of opportunity. For cleantech export from Queensland, identifying market entry opportunity is the key. It is said that Japan’s cleantech industry is advanced and highly competitive, but companies like Xerocoat (spin-off from UQ’s R&D on solar panel coating technology) has successfully formed a strategic partnership with Hitachi High-Tech, its sales and marketing partner in Asia/Pacific region. As a future strategy, we can promote Queensland’s strong TLO businesses such as Uniquest, when they visit Japan towards the second half of this year, to strengthen industry and university liaison for commercialisation. Japan Bank for International Cooperation has expanded its scope of assistance to developed countries in 2010. Assisted Tokyo Gas to fund off-take deal for Gorgon Project in off-shore WA. Innovation Network Corporation of Japan assists the creation of next-generation businesses through “open innovation” worldwide. – provides trade and investment insurance to facilitate international trade and investment between companies in Japan and overseas. Ministry of Economy, trade and Industry continues to target its financial support in infrastructure and renewable sector overseas through associated organisations such as NEDO.The most striking difference from typical inward investment deals is the availability of Japan’s public money, and this government’s willingness to push domestic companies be competitive overseas is the window of opportunity. For cleantech export from Queensland, identifying market entry opportunity is the key. It is said that Japan’s cleantech industry is advanced and highly competitive, but companies like Xerocoat (spin-off from UQ’s R&D on solar panel coating technology) has successfully formed a strategic partnership with Hitachi High-Tech, its sales and marketing partner in Asia/Pacific region. As a future strategy, we can promote Queensland’s strong TLO businesses such as Uniquest, when they visit Japan towards the second half of this year, to strengthen industry and university liaison for commercialisation. Japan Bank for International Cooperation has expanded its scope of assistance to developed countries in 2010. Assisted Tokyo Gas to fund off-take deal for Gorgon Project in off-shore WA. Innovation Network Corporation of Japan assists the creation of next-generation businesses through “open innovation” worldwide. – provides trade and investment insurance to facilitate international trade and investment between companies in Japan and overseas. Ministry of Economy, trade and Industry continues to target its financial support in infrastructure and renewable sector overseas through associated organisations such as NEDO.

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