Asia’s rapid growth is an opportunity Australian businesses are rightfully lining up to take advantage of – but it’s bigger than just the export market. Particularly in food and agricultural products, some of Australia’s biggest exports to the region, there are more – and often better – profits to be made in moving beyond exporting and into investing.
Research shows Australian companies have been very comfortable exporting food and agricultural products to Asia but the level of investment has not really followed suit.
A 2018 ANZ report shows the size of Australia’s investment opportunity in Asia has reached $A393 billion. One in three active business make over two fifths of the revenue from Asia and 61 per cent plan to expand their presence in the region over the next three years.
Yet this investment has been outweighed many times over by Asian companies investing in Australia looking to shore up their supply chain – and is still growing according to government figures.
With Asia’s rapidly expanding middle-class only getting bigger, Australian companies should be looking to invest directly. After all, the closer you get to the consumer, the better the margins.
And what margins. ANZ’s Opportunity Asia report showed 26 per cent of Australian businesses in Asia said their margins were much higher than in Australia – up from 16 per cent in 2016.