France-Australie Webzine - May 2014 by French-Australian Chamber

France aUSTRaLIE A publication by the French-Australian Chamber of Commerce & Industry

May 2014

AGRIBUSINESS: A Sprouting Field of Opportunity

France-Australie is a publication of the French-Australian Chamber of Commerce & Industry. It is distributed to all member organisations Australia-wide, French and Australian Government officials, EU representatives in Australian the French Chambers of Commerce in the Asia Pacific region and the CCI network in France. The French-Australian Chamber of Commerce & Industry was founded in 1899. At the time, Australia's trade relations with France were almost solely dependent on the export of the wool. More than a century later, this relationship now includes a host of many other industries.

OUR TEAM Olivier DESCHANG VIC Chapter Manager & National Coordinator Claire KASSES NSW Chapter Manager Sam KEIL VIC Chapter Membership and Events Manager Claire DUPRE QLD Chapter Coordinator

The French-Australian Chamber is an important not-for-profit organisation governed by 15 Board of Directors and comprising more than 700 members. Our head office is based in Sydney and we also have four other Chapters and offices in Melbourne, Brisbane, Perth and Adelaide. The Chamber is affiliated to the CCI France International, a worldwide network of

Bertrand CAUVIN Business Development & Trade Coordinator Julia LECOMTE NSW Chapter Communications & Membership Manager

111 French Chanbers operating in 81 countries.

Antoine GOBLOT Membership & Business Development Assistant

The Chamber's main mission is to promote our members and support French

Guillaume MAUBOUSSIN My Australian Job Coordinator

companies succeed in Australia through information, networking and business support services.

Kevin QUEMARREC Graphic Designer Lucille SALVY Business Development & Trade Assistant

This publication was prepared by the Trade Department of the French-Australian Chamber of Commerce & Industry Bertrand Cauvin Business Development & Trade Coordinator bertrand.cauvin@facci.com.au

Lucille Salvy Business Development & Trade Assistant trade@facci.com.au

Olivier Deschang VIC Chapter Manager & National Coordinator odeschang@facci.com.au

France-Australie - Agribusiness: a sprouting field of opportunity

Kevin Quemarrec Graphic Designer kevin.quemarrec@facci.com.au

EDITORIAL

Dear Readers, The French-Australian Chamber of Commerce and Industry is proud to release the third issue of France-Australie webzine since its revamping in 2013. This publication has gained an increasing readership with more than 10,000 views of its second issue Track to the Future. France-Australie webzine aims at promoting the French-Australian business community, the close bilateral relationships, and provide members with a platform of topical information. Our objective is to strengthen the Chamber’s communication and provide valuable information and visibility to our members and business partners in a growing sector of Australian economy. This business publication also intends to be beneficial for all French companies wishing to export or establish a subsidiary in Australia. This first edition of the year addresses the theme of “Agribusiness in Australia”, an industry among the most competitive in the country and identified by Deloitte as part of the five key sectors of the Australian economy in the next 20 years. The Australian Agribusiness will benefit from the global growth in food demand that will rise alongside the world population, as it is expected to grow by 60 million people a year over the next 20 years. Thanks to its advantageous geographic position, the diversity of climates and the abundance of natural resources, Australia will see the world “knocking on its door”. The Australian agribusiness industry has seen a deep transformation in the last 20 years and is now confronted with structural challenges and huge opportunities. If weather conditions, drought, ageing population are serious problems for the Australian agriculture; rising global demand, proximity to Asian markets and facility for trade and exports make the country the future “Farm of Asia”. This Webzine will try to enhance our knowledge on the Australian agribusiness trends and opportunities. The concrete insight of our contributors, experts in their domain, give an added-value information on the industry. Our special thanks go to Karen Schneider who will introduce the chamber’s webzine with a foreword overviewing the sector today. Contents addressed in this issue are the primary activities (agriculture production, machinery and innovation) and the food-processing industry (transformation and distribution) in Australia highlighting the future opportunities and perspectives of this particular industry. Finally we look forward to invite you to further this discussion during our Agribusiness Industry Forum 29th May in Melbourne. Bonne lecture,

Olivier Deschang VIC Chapter Manager & National Coordinator The French-Australian Chamber of Commerce and Industry

Cover from France-Australie Magazine - 1979

Wheat Field in Western Australia Picture from: https://www.agric.wa.gov.au

France aUSTRaLIE A publication by the French-Australian Chamber of Commerce & In ndustry

May 2014

AGRIBUSINESS: A Sprouting Field of Opportunity

France-Australie - Agribusiness: a sprouting field of opportunity

PATRON MEMBERS

France-Australie - Agribusiness: a sprouting field of opportunity

Australia is the 4th biggest market for farming equipment in the WORLD

France-Australie - Agribusiness: a sprouting field of opportunity

CONTENTS AGRIBUSINESS: A SPROUTING FIELD OF OPPORTUNITY

• Foreword - Karen Schneider - ABARES 08 • Thank you to our Contributors 10 • Overview of Agribusiness in Australia 14 • Australian Agriculture: Looking to Asia

• Production and Ownership Model Tony Mahar - Chief Executive - National Farmers' federation Bruno Fetiveau - Managing Director - Kuhn Australia • Competitiveness, Innovation & International Markets Christelle Santelli - Senior Associate - Gadens • A Sustainable Agriculture Vision for Australia Richard Dickmann - Head of New Business Development - Bayer CropScience

• The Agribusiness Industry 32

• Transformation & Increasing Capacity Gaétane Potard - Senior Research Analyst - Australian Farm Institute Kerry Watts - Managing Director - Growth AG

• Focus on Chinese Investment in Australian Agriculture

• The Distribution & Supply Chain Channels 42

• The Intermediate Distribution Channels Julien Hémard - Managing Director - Pernod Ricard Australia • Consumer Goods & Final Retail Jean-Yves Heude - Managing Director - ChessMate

• Agribusiness Future and Opportunities 47

• Opportunities for French Companies Paul McGahen - Chief Executive - Coface Agnès Baekelandt Dagueneau - Pacific Area Director - Andros • Perspectives Rob McConnel - National Industry Leader Agribusiness - Deloitte

• 2014 Conferences & Exhibitions 56 • References 57 • Newsroom 58 • Past Events 59 • Upcoming Events 62 • Membership

• Business Services

64 66

France-Australie - Agribusiness: a sprouting field of opportunity

FOREWORD

ʻʻ

The Australian agriculture sector is modern, productive and outward focused, typically exporting some two-thirds of its annual output. It is an important sector in the Australian economy and a major driver of employment and investment in rural and regional areas. Australian agriculture will be presented with very real opportunities in coming decades as world food demand rises and supports higher food prices. ABARES research suggests that world food demand could rise by around 75 per cent out to 2050, as a result of expanding populations and higher average incomes. Most of this growth is expected to come from emerging economies in Asia, and principally from China. And while China and other Asian economies are likely to increase their production of food, this is unlikely to meet growing consumption – imports will inevitably need to expand. As a food exporting nation, Australia will be well positioned to benefit from these trends. However, taking advantage of these opportunities will require appropriate responses from both the agribusiness sector and from policymakers, as other food exporting nations will also be seeking to exploit greater consumer demand. Climatic and other changes and trends will present additional challenges for a sector facing growing international competition. One of the key drivers of Australian competitiveness in Asian markets will be the rate of productivity growth in our agricultural industries. But productivity growth in Australian agriculture has slowed in recent years relative to past trends, presenting challenges for the sector itself, as well as for governments charged with implementing policies to lift productivity performance. There’s also a widening gap between the productivity of the ‘best-performing’ farms and ‘average’ farms. Moreover, the exchange rate has been persistently higher than recent historical norms, with the AUD being a little under 90US cents during 2014, putting further pressure on Australia’s export industries. While the exchange rate is not directly under its control, government has various levers it can adjust to influence longer-term productivity growth. Three that stand out are • The imposition of government regulations on the agriculture sector; • The provision of infrastructure that supports agricultural production and trade; and • The role of research and development in supporting agricultural innovation. With regard to the first of these, Australia has engaged in reforming and deregulating its agricultural sector over the past several decades. Australian farmers are already the second least supported in the OECD, behind only New Zealand. However while there has been a significant reduction in government regulation of agricultural output markets, in terms of instruments such as subsidies and price-support schemes, there exists a considerable set of regulations on input use, often motivated by concerns regarding the environment and human health. Some examples of these include agricultural chemical registration processes, access to genetically modified crops, and the management of onfarm native vegetation. Accordingly, the productivity benefits from removing price distortions and increasing exposure to competition have largely been achieved, but farmers remain regulated in various aspects of production. These regulations impose compliance and other costs upon farmers. They also affect

France-Australie - Agribusiness: a sprouting field of opportunity

the activities of businesses in upstream and downstream industries that have an effect on agriculture. Evidence from the World Economic Forum suggests that the burden of regulation in the agriculture sector in Australia is in fact increasing relative to some of our major competitors in export markets. Australia’s ranking in terms of regulatory burden has slipped from third in 2009 to twentieth in 2013, while Brazil – one of our key competitors – has improved its ranking to 23 out of 148 countries. Regulation is an important tool for governments to achieve their policy objectives. But the current Government focus on reducing regulatory burdens provides an opportunity to reflect on how we regulate, and the most cost-effective means of achieving particular policy goals. As a federated nation with constitutional delegations of powers to states, making progress in agriculture will require buy-in from the states as well. Regarding infrastructure, effective transport, water, energy and telecommunications will be needed to take advantage of new agricultural export opportunities. Our infrastructure will need to support a growing industry by moving food cost-effectively and efficiently to markets. Bottlenecks or unreliable service will reduce the competitiveness of agriculture and add to farmers’ costs. Much of the infrastructure currently supporting agricultural supply chains is already under pressure.

Finally, regarding research and development, our agricultural industries have benefited from past ‘industry focused’ public R&D efforts that have delivered significant productivity gains. Australia’s rural R&D system remains the envy of research providers overseas, with co-investment by government and industry, coordinated by rural research and development corporations. But R&D improves productivity only with long lags, and there has been slow growth in public funding for agricultural research since the late 1970s, helping explain the recent slowdown in productivity growth. With scarce R&D resources come growing demands for research into environmental and social impacts, and community awareness of and attitudes towards new practices and technologies. Prioritising R&D activities to maximise the payoffs to public funds, and improving incentives for increased private investment will become the primary challenges. Australian agriculture is well placed to take advantage of growing international markets for food, but the advantages conveyed by our proximity to markets cannot be taken for granted, and future success cannot be assumed. Good planning, good policy, and well-judged investments in R&D, infrastructure and elsewhere, will be essential to achieving the best outcomes from the expanding world market for food in years to come. Karen Schneider, Executive Director ABARES

ʻʻ

ABARES has identified potential pressures on infrastructure in several major supply chains. Examples include the need for an improved road network to support a substantial expansion of beef production and exports in northern Australia. For dairy production, expansion in some regions is likely to require additional investment in irrigation infrastructure, on and off farm. And for higher value products, investment in the infrastructure around air freight is going to become more important as exports expand. Broader issues around the way infrastructure is funded, including incentivising private sector investment, will also be important.

France-Australie - Agribusiness: a sprouting field of opportunity

THANK YOU TO OUR CONTRIBUTORS

Karen SCHNEIDER Executive Director ABARES Karen Schneider was appointed Executive Director of ABARES in November 2013. In this position she oversees the Bureau's program of work, including research and commodity analysis. Prior to that, she was First Assistant Secretary of the Department of Agriculture's Biosecurity Animal Division, Executive Director of the Bureau of Rural Sciences and Deputy Executive Director of ABARES. Karen spent eight years as an analyst at the International Energy Agency at the OECD, following several positions as an economist in the Australian public service. She holds qualifications in Applied Science from the University of New South Wales.

Tony MAHAR Chief Executive NATIONAL FARMERS' FEDERATION Tony Mahar joined the NFF as General Manager, Policy and Manager, Economics and Trade in July 2012. Tony brings an excellent understanding of policy development and the food and agribusiness sectors to the NFF, having joined the organisation from the Australian Food and Grocery Council (AFGC). As the Director for Sustainable Development at the AFGC, Tony was responsible for driving the response to key economic and sustainability challenges facing the industry. Prior to this, Tony was the Assistant Director of Food and Horticulture Industry Policy at the Australian Department of Agriculture, Fisheries and Forestry, where he managed industry policy, international trade and market access issues. Tony holds a Bachelor of Agricultural Commerce from the University of Sydney, a Masters of Business – Industry Strategy from the Australian National University and is a graduate of the Australian Institute of Company Directors.

Christelle SANTELLI

Bruno FETIVEAU

Senior Associate GADENS

Managing Director KUHN AUSTRALIA Bruno Fetiveau joined KUHN Audureau Factory in 2005 as Export Manager in Vendée (France), in charge of the Livestok machinery product range for all export markets. In 2010, Bruno became General Manager of Kuhn Farm Machinery. Based in Melbourne since January 2011 he was in harge of KUHN development across Australia. Then, in 2012, Bruno became Director of KUHN Farm Machinery Australia.

Christelle Santelli is a corporate and commercial lawyer specialising in mergers and acquisitions, capital raising and general commercial. She has acted for national and international clients in a range of industries, including the property development, financial services and superannuation, pharmaceutical and agribusiness sectors. Christelle is fluent in French and Italian, and is qualified as a lawyer in France, Italy and Australia. She joined the Gadens corporate team in 2010. Christelle regularly advises foreign companies (particularly French) on establishing their presence in Australia. She helps clients with their commercial arrangements and their ongoing corporate and commercial matters. Christelle’s language skills, qualifications and understanding of different business and legal cultures allow her to provide high quality and comprehensive services to her foreign clients.

10 France-Australie - Agribusiness: a sprouting field of opportunity

Richard DICKMANN

Head of New Business Development BAYER CROPSCIENCE After a 20-year international career with Bayer, Richard Dickmann returned to Australia in 2008 to take a position on Bayer CropSciences Executive Leadership Team as Head of New Business Development. This department is dedicated to assessing the long-term impact and trends facing Australian agriculture and creating new business opportunities which capitalise on the combined innovation power of Bayer and Australia. After working in government extension and agricultural insurance, Richard held various management positions with Bayer in France, Singapore, Japan, China and Germany, accumulating broad experience in food production and distribution issues. Richard believes it is an exciting time to be part of the Australian agricultural industry, specifically in crop science.

Gaétane POTARD

Senior Research Analyst AUSTRALIAN FARM INSTITUTE Gaétane Potard has seven years of professional experience as policy officer and adviser within the French Department of agriculture, food, rural development, fisheries and forestry. Gaétane hold a master in agriculture & environmental Sciences and economics and a degree in public policy. She grew up in Dijon, France with a family involved in dairy and wine. Her role at Australian Farm institute is to assist with the coordination of research project, condct research and assist with the publications and website.

Kerry WATTS

Managing Director GROWTH AG Mr Watts has been involved in the Australian agricultural industry since 1976 when he began work for Schering Pty Ltd. In 1992 Kerry started an Agricultural retail business Total AG Services (TAGS) and a Manufacture and Distributor business (Growth Agriculture). As owner and Managing Director of Growth Agriculture he has commercialised a number of niche products, including Pred Feed (beneficial insect attractant), Vivus (NPV based insecticide) and Growth B&B (alternative organic fertiliser). Growth Agriculture is heavily focused on the promotion and development of environmentally sustainable agricultural practises.

Julien HÉMARD

Managing Director PERNOD RICARD AUSTRALIA Julien Hermard has been the Managing Director of Pernod Ricard Australia since July 2010. In his role as Managing Director, Julien successfully leads a team of more than 250. Julien first joined the Pernod Ricard group in 2003 as Marketing Director with Pernod Ricard China. Three years later he took a position in the Philippines, where he served as country Managing Director for a year and a half, before returning to China in 2007. He spent three years as the Deputy Managing Director in China before being promoted to his current Australian position. Before joining Pernod Ricard, Julien had worked for Casella and Campbell Distillers International. Julien holds an MBA from the INSEAD School in France.

France-Australie - Agribusiness: a sprouting field of opportunity

THANK YOU TO OUR CONTRIBUTORS

Paul MCGAHEN

Jean-Yves HEUDE

Chief Executive COFACE Branch in Australia

Managing Director CHESSMATE

Jean-Yves HEUDE has 25 years of strong track record in blue chip FMCG Companies (Kellogg’s, Mars, Martini), with the last 10 years as Managing Director of country or cluster of countries with full P&L accountability, with 20 years in Europe and the last 5 years in ANZ. Jean-Yves created ChessMate Consulting in September 2013. ChessMate Consulting is an independent consulting firm offering to help FMCG Companies, primarily in ANZ, to grow Revenues profitably despite the new Retail environment. Jean-Yves’ main achievements have been to grow businesses profitably in tough retail environments in developed markets, and build strong teams. Specifically in Australia, from 2008 till 2012, Jean-Yves managed to grow Revenues and share, without affecting the P&L structure, despite the historic shift of the Retail environment.

Paul McGahen is the Chief Executive of Coface in Australia. He is based in Sydney and oversees the operations and business development in Australia and New Zealand. Paul joined Coface in his current role in September 2012. Prior to joining Coface, Paul was CEO of LawCover Insurance and has held senior executive positions in both Allianz Australia and GIO Australia. He is and has been a director and company secretary of a number of companies associated with his current and former roles. He is a graduate of the University of Sydney in Economics and Law, attended the Australian Graduate School of Management, is a Fellow of both the international Institute of Chartered Secretaries and Administrators, and the Governance Institute of Australia.

Agnes BEAKELANDT-DAGONEAU

Rob McCONNEL

Pacific Area Director ANDROS PACIFIC

Agnès grew up between France, Marquesas Islands (French Polynesia) and Saint-Pierre-et-Miquelon (East of Canada). She graduated from ESCP Paris Business School in 2001 and first worked as a Consultant in strategic marketing, with a focus on distribution channel optimisation, for Microsoft and Siemens. She joined Research International as a Group Leader to manage market studies dedicated to food and beverage industries. Then she joined ANDROS, firstly to set up the Solidarity actions of the Group, then to create and manage the Sustainability & Ethics department of the company, and finally to take in charge the Corporate communication of ANDROS. In January 2014, she moved to Melbourne with her family, so as to set up Andros Pacific branch. She is now in charge of the company for the whole pacific area: Australia, New Zealand, New Caledonia and French Polynesia.

National Industry Leader DELOITTE Rob McConnel is a corporate finance partner with Deloitte and leads their Agribusiness Industry Group in Australia as well as being a member of Deloitte’s Global Food Value Chain Centre of Excellence. As well as strong family ties to the Agricultural Sector, Rob has a Bachelor of Agricultural Economics and previously worked within the finance sector across Northern New South Wales, Central and Western Queensland. Rob has over 17 years’ experience which has included a two year secondment with Deloitte’s London based Private Equity Transaction Services team. Rob regularly produces thought leadership on the Australian Agribusiness sector and has been interviewed by a number of media outlets with respect to industry views. Most recently, Rob was a co-author on Deloitte’s third instalment of their Building the Lucky Country series, “Positioning for Prosperity? Catching the next wave.”

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Thursday 29 May

Growth Sectors • Market Regulations • Asian Food Bowl

with Jammie Penm, Chief Commodity Analyst and Assistant Secretary Agricultural Commodities and Trade Branch in ABARES

OVERVIEW OF AGRIBUSINESS IN AUSTRALIA The great diversity of climate; the proximity to the Asian market and a reputation for high quality products has enabled the Australian Agribusiness Industry to become one of the most competitive industries in the world.

INDUSTRY SNAPSHOT

Revenue (2013)

$206,9bn

Australian farmers produce almost

93%

Annual Growth 09-14

3,2%

of Australiaâ&#x20AC;&#x2122;s daily domestic food supply, and produce enough food to feed 60 million people.

Business

134,000 12%

of Australian GDP ($155 billion)

The Agribusiness Industry Largest Industry of the Country

1,6

Million jobs

(18% of jobs in the industrial sector)

AUSTRALIAN AGRICULTURE Each Australian farmer produces enough food to feed 600 people, 150 at home and 450 overseas.

134,000

Farm businesses

14 France-Australie - Agribusiness: a sprouting field of opportunity

$47 BILLION income in 2013 (3% of GDP)

307,000

employed in Australian agriculture

THE FARM OF ASIA Australian farmers export around 60% of what they grow and produce. Australia’s farm exports earned the country $39.3 billion in 2013-14, up from $32.5 billion in 2010-11.

• Value of Australian farm exports, by commodity, 2011-12 Grains & oilseeds - 32,8%

Cotton - 7,1%

Wool - 7,6%

Sugar - 3,7%

Dairy - 5,9%

Wine - 4,8%

Beef & Veal - 13,7%

Horticulture - 5%

Lamb & Mutton - 4,6%

Other - 14,8%

Source: ABARES, Australian Commodity Statistics, 2013

• Major Exports Markets Chine - 19%

EU - 27,8%

Japan - 12%

Middle East - 9%

Asean - 20%

US - 6%

Others Asian countries - 15%

Other - 11%

CHALLENGES & OPPORTUNITIES • Dollar Value

• Aging population & Skills shortage

A$ will settle at closer to U.S.80 cents in the longer term

Farmers are old, and getting older, with the average age of Australian farmers at 52, 12 years above the national average for other occupations.

• Drought

2/3

of Australian farmlands are located in drought areas Australia is the world's driest inhabited continent

• Growing Food Demand By 2050, over 60% of the world's demand for agrifood will come from Asia.

• Comsuption change

“The world is on

the cusp of a leap in demand for highervalue food products

„

Deloitte

France-Australie - Agribusiness: a sprouting field of opportunity

AUSTRALIAN AGRICULTURE: LOOKING TO ASIA PRODUCTION & OWNERSHIP MODEL Tony MAHAR

NFF General Manager of Policy & Trade and Economics

The National Farmers' Federation (NFF) is the peak national body representing farmers and, more broadly, agriculture across Australia. What are the core competencies of NFF regarding Agribusiness policies and activities in Australia? As one of Australia's foremost and respected farmers’ advocacy organisation, how has the NFF been influential and supportive for the Australian Agriculture stakeholders? Since the NFF’s inception in 1979, the NFF has earned a reputation as a leader in the identification, development and achievement of policy outcomes affecting Australian farms and agribusiness. One of the keys to the NFF’s success has been its commitment to present innovative and forward-looking solutions affecting agriculture, striving to meet current and emerging challenges, and unlocking our industry’s potential. Our team work extensively in policy and advocacy to ensure Australian agriculture has a united and strong voice on the key priority areas affecting the industry. Our policy portfolio covers a broad spectrum of issues including farm business and productivity, trade and market access, natural resource management, biosecurity health and welfare, and education and training. While there are significant challenges ahead, we will continue to work with industry and government on issues of national importance, ensuring Australian farmers are best represented now and into the future. Regarding the last decade and current agricultural situation, what have been the main structural changes within the Australian agricultural sector during the last 10 years? And how would you describe current agricultural sector in Australia? Like most industries, Australian agriculture is constantly evolving to remain both competitive and sustainable in the long term. Australian farmers work within a highly volatile operating environment, encouraging farmers to look at new farming practices, business models and technologies to meet growing demands. There have been various structural changes to Australian agriculture over the last 10 years, ranging from regulatory impacts, ageing

infrastructure, market access, social licenses, natural resource management and much more. Whilst many farms are family-owned and operated, there has also been a big shift towards specific agricultural operations that are run similar to any other corporation. Hence, the modern role of farming is changing. We have seen more and more farmers adopt large scale mechanisation, irrigation practices, grain handling, storage systems and diversified operations in the last 10 years. As an entire sector, Australian agriculture has experienced significant growth over the last decade. The ABS outlined that from 2000-01 to 2010-11, the Agriculture, forestry and fishing industry recorded an average annual growth in labour productivity of 5.3%, the highest of all industries . Domestically, the sector must continue to be competitive against other sectors in the domestic economy, and utilise resources productively. With approximately two thirds of agricultural products exported overseas, international markets are vital to the improved profitability of agribusinesses and farmers across Australia. Hence, building stronger economic ties with regional and international counterparts has become more important than ever.

“Australian farmers work within a

highly volatile operating environment, encouraging farmers to look at new farming practices, business models and technologies to meet growing demands.

„

Australian agriculture is an important, diverse and vibrant sector. It provides social, economic and environmental benefits across the country. And whilst perceptions of

16 France-Australie - Agribusiness: a sprouting field of opportunity

the sector are generally positive, a common narrative of Australian agriculture is still yet to be realised. In the last 10 years, the sector has taken a proactive approach to raise better awareness of Australian farmers and their association with the land, their livestock and practices. With the rise of social media and Web 2.0, we have seen more and more individuals head online and tell the vital story of Australian agriculture to local and wider audiences. As a whole, we need to continue driving visionary projects, such as the NFF-led, industry-driven Blueprint for Australian Agriculture, to continue to promote the capabilities of our dynamic sector. The NFF launched in October 2011 the “Blueprint for Australian Agriculture”, bringing together all with an interest in, or involvement with, agriculture to help shape its future Could you tell us a bit more about this report? What are the objectives and outcomes of this report? What will be the Strengths? Weaknesses? Opportunities? Threats? Challenges of the Agribusiness Industry in the next 20 years? The Blueprint for Australian Agriculture (the Blueprint) aims to set the agenda for the Australian agricultural sector and the wider supply chain—a type of strategic plan for the sector. The report initially outlined seven key priority areas, and most recently, decided to focus on four of these areas that require immediate attention. These four areas include Competitiveness, Innovation RD&E, Natural Resources and Agriculture within Society. Since the Blueprint’s inception, the NFF has led a series of forums that have brought together key decision makers and thought leaders across the sector to discuss the big ticket policy issues affecting the sector and to outline the vital next steps to address these issues. The Blueprint process has also identified the varying opportunities for the sector. These range from the need to eliminate trade barriers and open up market access, embed sustainability as core business, ensure a research and development model can be effectively implemented and lastly, but equally important, ensure the perceptions, values and attitudes of Australian agriculture accurately reflect the modern role of Australian agriculture. In terms of agribusiness, the landscape in which it operates will be continually changing, driven by a combination of global and local pressures including food security, foreign investment, localised competition, commodity prices, ageing farmer population and higher production costs . However, as the Deloitte ‘Building Our Lucky Country’ report recently outlined, Australian agribusiness will be one of five sectors that will offer both high growth rates and significant returns to Australia’s economy in the future.

“Australian agribusiness will be one of five sectors that will offer both high growth rates and significant returns to Australia’s economy in the future.

„

Regarding globalisation and international competition, Australian agriculture has to be flexible and remain innovative in order to gain competitiveness in the world primary markets. How can the NFF help Australian farmers to accelerate their development and adaptation to the environmental and economic changes? Firstly, Australian agriculture’s competitive advantage is in its ability to produce and supply high-quality, safe, trusted food and fibre. The NFF is of the view that profitability is the key driver of competitiveness and understands that a competitive sector is constantly growing, innovating and cooperating across the supply chain. We believe that the improved competitiveness of the agricultural sector will be the result of a combination of complementary policies and initiatives across all levels of government. As such, the NFF will continue to help develop policies that underpin further investment in infrastructure to reduce inefficiencies, encourage further research and development to improve existing technology, reduce red tape and ease the regulatory burden on farmers. By addressing such areas, this will ensure Australian farmers are in a sound position to remain domestically and globally competitive. International markets are also critical to the future of Australian agriculture. Government policy must be focussed on working closely with those who know the industry best, and implement a clear and cooperative strategy for increasing growth in exports that deliver higher returns to farmers. Furthermore, Australian farmers who are some of the most efficient and sustainable in the world—not only care and manage 59 percent of Australia’s landmass, many are also actively involved in environmental volunteer programs, like Landcare and other initiatives, like the Blueprint NRM Working Group. Australian farmers are adaptable and resilient, and continue to implement sustainable and diversified farming methods to address climate variability and other environmental concerns.

France-Australie - Agribusiness: a sprouting field of opportunity

AUSTRALIAN AGRICULTURE: LOOKING TO ASIA PRODUCTION & OWNERSHIP MODEL

“Australian farmers who are some of

the most efficient and sustainable in the world—not only care and manage 59 percent of Australia’s landmass, many are also actively involved in environmental volunteer programs.

„

Regarding increasing Foreign Investment in Australian Farmlands and agribusiness industry, what is NFF point of view of this foreign attraction for Australian agriculture? Do you believe this is an opportunity to further develop Australia as “the Farm of Asia” or conversely is it a structural threat for national farmers’ activities?

The Parliament of the Commonwealth of Australia recently established “The Australian Ownership Bill 2013” which limits foreign investment in Australian agribusiness and agricultural land. How this crucial decision has impacted and protected Australian farmers against foreign investors? What is NFF point of view regarding this? Don’t you think there is a contradiction between the Cairns Group policies and this Australian Government statement? This is not an Australian government or Parliament statement. The Australian Ownership Bill 2013 was a Bill introduced by the Federal Member for Kennedy (Qld). In the Australian Parliament members have the right to put up Bills which represent views they hold or their constituents hold. There is a large number of these Bills put forward each

The NFF supports the investigation into alternative farm ownership and operation structures that will assist in attracting domestic and foreign capital markets. There is no doubt that foreign investment is a critical component of the future of Australian farming. Foreign investment has been beneficial for Australian agriculture and the continued investment—both domestic and foreign—will be required to ensure the industry remains globally competitive and has the capacity to take advantage of new opportunities and markets, such as those in Asia. Australia has always had a strong focus on export markets, with approximately two-thirds of production currently exported to international markets. However, there needs to be more clarity and perspective on labelling Australia as the “the Farm of Asia”. Australian agriculture will have a specific and important role to play in the developing markets of Asia and elsewhere. Yet it does not have the capacity to satisfy the huge projected demands of Asia, alone. This is not perceived as a threat as such, but a challenge, to ensure our food and fibre is globally efficient and sustainable to take advantage of these new opportunities in Asia.

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year and they very rarely get enacted into legislation. The Federal Member along with a number of other Members of Parliament hold a range of views some of which the NFF agrees with and some of which we like to understand and consider in more detail. The government of the day sets the policy in relation to investment in Australian agricultural land and the current government policy is that investment above $15m in land or $53m in agribusiness gets referred to the Foreign Investment Review Board (FIRB). The NFF has always looked upon foreign investment in agriculture as a positive thing and we would welcome investment on the basis that it has a positive impact on the sector, the investment is transparent and complies with all domestic legislative requirement and does not have a distorting impact on the markets.

Australia is currently experimenting one of the driest years since a century and local Farmers are facing serious problems of water supply and extreme drought in some areas of NSW, Queensland, South Australia and the Northern Territory. What are the main threats for these farmers? Do you think Australian agriculture will recover or would have to adapt to climate change and change its practices? To provide context to your question, the current dry has not just been â&#x20AC;&#x2DC;a few dry weeksâ&#x20AC;&#x2122;, the current drought has been building for over two years in some areas, compounded by the hottest year on record across Australia in 2013, along with many regions receiving record low rainfall. The severity of drought has been unprecedented, and can outweigh any level of drought preparedness. Farmers do their very best to drought-proof their land, and to save during better seasons, however the current drought that had much of the nation in gripsâ&#x20AC;&#x201D;was too destructive and too prolonged for many farming businesses. The flow on effects are definitely felt by the farmers, their families and communities. There are many issues faced by farmers in drought, including rising debt levels, capacity to make household payments, limited water for livestock, personal stress and managing pest animals. To help relieve the pressure faced by farmers, the Federal Government recently released a drought relief package, designed to provide financial and social support to these farmers. Australian agriculture will recover, and these measures will help viable farming business get back on their feet. But we need to focus efforts on long-term drought policy. It is a fact that Australia faces severe climate volatility. And farmers are both aware of this, and are doing their best to not only prepare for these hard times, but pursue innovative farming practices to address environmental issues. If I could describe Australian farmers in three words, it would be adaptable, resilient and innovative. The NFF is currently seeking appropriate assistance measures from the Federal Government. How would you describe your relation with the government and DAFF? Are you working together on common policies for the future of agribusiness in Australia? The NFF works as the peak national body representing Australian farmers and agribusiness. In conjunction with our Members, we identify issues affecting Australian agriculture and work with industry and the Federal Government to ensure these policy priorities are on the national agenda. Like all Departments, the Department

France-Australie - Agribusiness: a sprouting field of opportunity

AUSTRALIAN AGRICULTURE: LOOKING TO ASIA PRODUCTION & OWNERSHIP MODEL of Agriculture and the NFF work cooperatively to develop policies and programs that enable Australian agriculture to remain competitive, profitable and sustainable. In terms of assistance, we are seeking drought assistance to help farmers stay on the land and keep their business running. These are short term approaches and only available to those businesses that are experiencing severe difficulty and hardship. The government is currently in the process of completing a White Paper on the competitiveness of Australian agriculture which will be the basis of government policy for the sector. The NFF and other industry associations are having significant input into the development of this paper and we will continue to work cooperatively with government to set the right agenda for farm businesses in Australia.

variations and production capacity can have a huge impact on farm business profitability and competitiveness. Australian farmers export around two thirds of what they produce so the terms of trade are always going to be important. The fluctuations in the dollar make returns more variable and this has large impacts on those commodities that are export-dominated. A high Australian dollar does impact on the returns and prices received by farmers, it makes Australian products less competitive on the global market. To try and combat this impact, Australian farmers are constantly seeking to improve efficiency on farm and ensure they are globally competitive.

Chair of the NFF Water Taskforce, Les Gordon, said a focus on water infrastructure is necessary to help address Australiaâ&#x20AC;&#x2122;s agricultural sustainability. What are the main NFFâ&#x20AC;&#x2122;s actions plan to help agriculture industry regarding water infrastructure projects? The NFF has welcomed the recent announcement by Minister for Agriculture Barnaby Joyce, to establish a ministerial working group that will investigate water infrastructure projects. We believe that by having a specific ministerial group focused on water, it will provide industry with the reassurance that the broader infrastructure needs of rural and regional Australia are on the governmentâ&#x20AC;&#x2122;s agenda. The NFF and Members have continued to advocate for a real commitment from the government to develop innovative and sustainable water infrastructure projects, aimed at long-term water security. More specifically, it is understood that the group will look at new dams, harvesting options and water storage in underground aquifers. Australian agriculture is highly sensitive to the value of the Australian Dollar, due to the extreme dependence to international trade activities (two thirds of the production is going abroad). A high value of the Australian Dollar is a direct loss for thousands of Australian farmers (loss of competitiveness). According to your organization, a 1% decrease of the value of the dollar would lead to more than $ 220 million surplus for export. Australian dollar has been getting weaker and weaker since the last few months, have you noticed a real change for farmers in terms of competiveness and profitability? Australian farmers have to deal with a range of variables in their business. The most difficult and significant variable in Australian farming is the climatic conditions. Seasonal

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AUSTRALIAN AGRICULTURE: LOOKING TO ASIA PRODUCTION & OWNERSHIP MODEL Bruno FETIVEAU

Managing Director KUHN AUSTRALIA

How long KUHN has been operating in Australia? How would you consider the Australian market for KUHN? Well, KUHN is a long established company in Australia. Even though some machines landed in the seventies, this in 1984 that KUHN has decided to move seriously with a KUHN man dedicated to the company products as well as our first Dealer Vin-Rowe based in Warragul to import our machines down here. Back then, KUHN was a small French hay tools manufacturer. Despite the fact, Australia represents only 2% of the world Ag machinery market; it completely takes part in the KUHN Group global growth strategy. KUHN has a very long success story, with origins back to 1828 in Saverne, how would you describe the “savoir faire” of Kuhn globally? Early 2000 KUHN celebrated 175 years of Excellence. Excellence meaning emphasize on quality and “savoir faire”. This is in 2002 that KUHN pins in the change to a new era of globalization. It is with its first foreign factory acquisition in USA (Wisconsin) that KUHN did really change mentality within the Group. KUHN has always put quality first and capitalized on this unique focus to spread its name and then, know-how out of France. KUHN was known for being the first French farm implements manufacturer exporting worldwide in the 60’s. KUHN has now become world N° One implements manufacturer with 10 production sites across the globe and more than 5,000 employees. Yes this is a real success story.

“Early 2000 KUHN celebrated 175 years of Excellence. Excellence meaning emphasize on quality and “savoir faire”.

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KUHN is very active in R&D for the agricultural industry. Would you be able to tell us a bit more about some of your current and future equipment projects in agribusiness? How this researches/ projects could lead to an improvement of agricultural productive capacity? This is a sensitive question. Yes KUHN invests 4% of its annual Turn Over in research and development in new products. The Group is also committed to its Dealer network to release a of lot new products in the forthcoming years. All this doesn’t make KUHN R&D department only very busy but above all, it makes it a corner stone of our success. Taking the world as playground, KUHN needs to be listening to all trends and changes that occur in all continents. Adapting machinery to local needs is a key of success. So this is what we do. However farming enters in a fabulous era where information and data communication is a must. Internet, satellites mapping, smartphones and tablets become extension of our own and farming implements. The machine not only communicates with the tractor, it communicates with the satellite that transmit information to the farmer’s computer, the crop adviser, the Dairy nutritionist, the machinery dealer about soil quality, fertilizer needs, feed mix balance, machine work function sate and ultimately impact positively on farm profit management. A continuous evolution remains farm size growth. Farms haven’t stopped to reduce in numbers and increase in size. It is fair to say that, the number of farms reduce by half every 10 to 15 years and increase by twice their size. This is a worldwide fact. So what, these changes impacts as well machinery and farm equipment. Our new machines are wider, larger, bigger and able to mow, bale, rake, work the soil, and feed the cattle more precisely in less time. KUHN specializes in manufacturing farm machinery and is among the world leaders in this industry. How would you describe the Australian market in terms of products requirements? What are the products’ bestsellers in Australia? Australia needs in terms of products requirements vary a lot. Due to its size and various climates, Australia can

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produce everything. Dairy cattle, Beef, sheep, pasture, cotton, sugar can, rice, wheat, oilseed, fruits, wine etc… everything. Australia has a fabulous farming potential; therefore there is room for almost all kind of equipment. KUHN has made is name well-known for hay and forage making machineries, and we probably still sell 50% of our implements in that segment. The past couple of years we have noticed a shift in product focus pairing with today’s concerns about farm cost management. Fertilizer spreader has become an important tool for the farmer and consequently for us. It brings with it all the new computerized features that help in tracking fertilizer application making huge savings for farmers.

“Due to its size and various climates,

Australia can produce everything. Dairy cattle, Beef, sheep, pasture, cotton, sugar can, rice, wheat, oilseed, fruits, wine etc… everything.

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Could you tell us more about your supply chain management in Australia? You distribute a full range of agricultural products to local farmers in the country (from ploughing and tillage machinery to sprays and fertilizers): how do you manage your supply chain across the country, where some of your clients are often remote or far away? Well, with about 125.000 farms spread out the supply chain management is pretty important. KUHN distribution policy remains the same since the early days. It worth for any country in world KUHN sales in. In near than 200 years, KUHN has built a very strong Dealer network. In Australia we reach the end user respecting the exact same policy. About 80 Dealers outlets located in the main farming and crop production areas represent the KUHN brand. The machinery Dealer acts in the name of KUHN and sells whatever product suit the area and the farmer’s need. Farm sizes get bigger, numbers of farms get smaller and farms sites get more and more remote. This is the exact same trend with machinery Dealers. From 1,200 machinery workshop outlets 15 years ago, around 600 still survive today.

Another question regarding the supply chain: you have an extensive of network of resellers (dealers) across the country: how would you qualify the relation suppliers /retailers in your industry? Our Dealers are (unfortunately) not exclusive to KUHN, they could well have other opposition machinery franchises to offer. This is why the Dealer network management is paramount to keep KUHN in the Dealer’s eyes at all time, and therefore make KUHN the best alternative for the farmer. KUHN offers a unique technical support that stand out of the crowed and makes a real difference when time comes to rely on someone that knows about the product. A team of 7 KUHN-men are equipped to support sales and technical aspects in the most remote areas. How would you describe the current economic situation of the Agribusiness industry in Australia (locally and globally)? What are the main opportunities, threats and challenges for this industry in the next 20 years? We are lucky that we have such a strong dealer network. However this is a segment that touches every part of the farming economy. When machinery sales well it is the ultimate sign of a healthy farming environment. The Australian farmers’ community are grounded people, and makes decisions on proven facts. Australia’s farming did cross a lot of hardships due to a decade of severe drought, eventually ended since 2010. Ended but not everywhere, as we know Queensland is still touched. Selling farmers best tools to face the new economic challenges is not dealt in a steady and reliable market environment, as it is in Europe for instance. Short terms predictions are almost impossible; blink and market conditions have completely changed because of a drought, because of a flood, because of a falling commodity price. Australian farmers can’t be certain than tomorrow is going to be good. European climate is more predictable and even, commodities prices are subsidized to secure farmer investment and production plan. Nothing as such in Australia. But guess what, this is in industry you have higher risks that you also have the best returns. Same with Australian farming, I suppose. Australia Agribusiness has one of the greatest opportunities of return on investment. Why should we invest in Agribusiness? Just simple facts. 60% of the world population lives on our doorstep. Asian’s purchase power increase with country wealth. The growing middle class category population eats more meat and drinks more wine. Asia economy will carry growth for at least the next 20 years and Australia is best placed to supply hungry mouths. No doubt about it. This is now, in Werribee. Vegies are produced in Werribee and airfreighted to Japan overnight to be served on the menu of

France-Australie - Agribusiness: a sprouting field of opportunity

AUSTRALIAN AGRICULTURE: LOOKING TO ASIA PRODUCTION & OWNERSHIP MODEL the best Tokyo’s restaurants, the next day. We are in pole position because we are near, because we have fertile lands. Australia has 2.5ha of arable land per capita, where as China has only 0.1ha and USA has got only 0.5ha. We have water reservoirs that make Australia the most secure country to invest in food production for the years to come. Deloitte recently released a report stating Agribusiness being the next growth wave for Australia, with an average of 4.06% growth rate for the next 30 years.

“ This is in industry you have higher risks that you also have the best returns. Australia Agribusiness has one of the greatest opportunities of return on investment.

„

Australia is currently experimenting one of the driest years since a century and local Farmers are facing serious problems of water supply and extreme drought in some areas of NSW and Queensland. What are the main threats for these farmers? Do you think Australian agriculture will recover or would have to adapt to climate change and change its practices? Do you think that these extreme conditions impact Kuhn activities in the country? High potential and high risk! Farming in Australia isn’t a restful activity. The farming community is a tough community, and drives their farms bearing in mind these risks. This total awareness of “what could happen if…” has created business models that in most cases adapt very well to these challenges. On the other hand, you can only resist so long. A reason for these farms to give up is due to lack of succession plan. Work the soil and milk the cows doesn’t attract much the young population, especially when a drought or a flood may arise at any time. Climate changes are not disputable. It does impact farming practices and consequently influence the type of machinery KUHN supplies. We have in these recent years seen the shift in sales from wheat stubble cultivators, working soil down to 15-20cm deep, to lighter models working to a depth of 3 to 5cm. It preserves the moisture kept underneath. A so called “Striptill” for “tillage practice in strip rows” will become a major cultivation way in the future. The “Striptill” machine does only work the exact lane in which the seed grow, leaving intact the rest of the field and then persevering moisture, reducing fuel consummation and consequently carbon emission.

Extreme conditions have always been in Australia and farmers will adapt without any doubt. KUHN relies on its experience since 1984 in Australia to react and adapt to these changes, and I am more than confident that future is bright for us. The Australian dollar is getting weaker: is it an opportunity or a threat for Kuhn in Australia? It is a real opportunity. Weaker is the Australian dollar, more expensive are imported machines, yes but, easier is to export Australian farm commodities. The Ag industry export about $32 Bn, representing 20% of Australian export and remember export will grow. From the farmer point of view, the most important is to be paid well for what he produces, then he can afford to pay more for the machine that he really needs. A weaker dollar is beneficial for everyone. Regarding increasing Foreign Investment in Australian Farmlands and agribusiness industry, what is KUHN point of view of this foreign attraction for Australian agriculture? Do you believe this is an opportunity to further develop Australia as “the Farm of Asia” or conversely is it a structural threat for national farmers’ competiveness? Frist of all, foreign investment is a strong sign sent to all, shouting, “Climb on board agriculture, it’s the next growth wave, we trust in Australia growth potential and you should trust in too”. In 2010, KUHN has invested in a unique service platform near Melbourne to re-structure the import and distribution organization. Dozens of other firms have also invested in various segment of the Agricultural industry: Few examples of the last ones, In farm machinery dealerships, Cervus from Canada; in milk processing, Saputo from Japan; in farmland, Hassad Foods from Qatar, in abattoirs, JBS beef from Brazil. The world will not feed 8.5 billion people by 2030 without serious capital investment where is the best potential. Yes it is golden opportunity for farmers and for us all. Farmer’s competitiveness is of course part of the equation and I will then push the ball in the Australian government camp. The government should better consider financial support for the farming community toward this long term vision.

“ The world will not feed 8.5 billion

people by 2030 without serious capital investment where is the best potential. Yes it is golden opportunity for farmers and for us all.

24 France-Australie - Agribusiness: a sprouting field of opportunity

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Australia and China are increasingly inter-dependent and the agribusiness industry is also concerned. Since 1984, they cooperate through the Australian China agricultural cooperation Agreement (http://www. daff.gov.au/market-access-trade/iac/acaca). How do you see Chinese growing investment and ownership within the Agribusiness industry? How does KUHN react to Chinese investment and increasing demand? Chinese investments is at its early stage and still is of minor impact but it will grow because of our lower dollar, our fresh product proximity, our reliable source of production, our dry-land farming techniques, our arable land available. Why be more concerned about Chinese investments than any other country? Are we concerned about Chinese real estate investors, boosting our property value? Land is available for sale; building houses or growing vegies doesn’t make any difference to me. As far as machinery is concerned, Australia is Australia with its tough and rough working conditions. The increase of Chinese import machinery isn’t on the agenda. Big and serious farm operations need big and serious machines with quality built which handle these rough conditions. European and Australian made machines will still be a cut above. In terms of logistics and supply chain management, how does KUHN improve or manage the technical challenges for a sustainable machinery manufacturing and a reliable and safe supply chain delivery? Our investment made in 2010 was all about this. Securing the supply chain with the proper machines for the proper season of the year. A big strength for KUHN Australia, we are the subsidiary of the manufacturer. We have a privileged business relationship with our KUHN colleagues in France, Netherland, Germany, USA, Brazil. These manufacturing plants listen to us and act toward the company unique goal, becoming N° One in all continents. Our Melbourne based warehouse store 4,500m3 of machines under cover and has a block of 11,000m3 in total to keep safe our biggest models. Forecasting and planning ahead is the key in our business. Our dealers play an important role in the forecasting process. What are the next 12 months made of? We listen to the field as much as possible, and analyze signs and directions we need to take as far as, what machine and how many we need to order a year in advance. Pre-seasonal programs help the dealer to convince farmers to buying machines. Order now, get delivered later and get extra discount. This is the only way to make relevant factory production planning. This is common practice in all industries, however so true when talking in-between $50 to $100K a piece of equipment. Our machines are renowned for their

life cycle value. Without any-doubt, a machine KUHN is an investment worth to look at for long term return. How KUHN companies manage the pressure from Australian farmers whilst remaining profitable and sustainable? In such high volatility market and high future expectation, you cannot trade with sort term view. It is necessary to make long term business plan taking into consideration the long term expansion prediction of our sector of activity. KUHN Group is embracing the next decade with a lot of enthusiasm, investing in mature markets as well as fast growing potential ones, as we are, here down under. What is the future of agribusiness in Australia? What will be the main challenges and opportunities for this particular industry in the next 20 years? There are more than One challenge, there are several challenges: -production and productivity -environment impact -waste and surplus management -… Food supply for 8.5 billion people isn’t it a fabulous project in which every sector of the Agribusiness need to be deeply involved to make it a success? Farming is at the center of more than one debate, feeding the population, fueling our cars, making our cloths, keeping us healthy. A bright future in perspective!

“The Ag industry export about $32 Bn, representing 20% of Australian export. „

France-Australie - Agribusiness: a sprouting field of opportunity

AUSTRALIAN AGRICULTURE: LOOKING TO ASIA COMPETITIVENESS, INNOVATION & INTERNATIONAL MARKETS Christelle SANTELLI Senior Associate GADENS

The Australian dairy industry making headlines nationally and internationally Australia’s dairy industry has recently been in the spotlight with the acquisition saga unfolding around Warrnambool Cheese & Butter (WCB). The contest for WCB (which produces close to 10% of the national milk production) began on 12 September 2013, with Bega launching its first bid. Saputo’s offer made on 8 October 2013 was unanimously recommended by WCB’s board. Murray Goulburn’s bid followed, while Lion (controlled by Japanese Kirin) and Fonterra (New Zealand) acquired higher stakes in WCB. After an unpredictable game of final offers and stakes increases, Saputo (Canada) finally won the long-running battle for $519 million, achieving a 87.9% holding in WCB (just below the 90% threshold required for a compulsory acquisition). Other recent acquisitions and joint ventures have also shown the interest of major international dairy players in the Australian dairy industry: Murray Goulburn’s joint venture with Danone, the acquisition of yoghurt specialist Tamar Valley Dairy by Fonterra, the acquisition by Chinese company Bright Foods (through its Australian whollyowned subsidiary Manassen) of the cheese and yoghurt business Mundella, the acquisition of United Dairy Power by Hong Kong Investor William Hui, and most recently, the acquisition of Harvey Fresh by Parmalat (controlled by Lactalis, from France). Over recent years the two largest supermarket chains operating in Australia (Coles and Woolworths) have embarked on an energetic campaign of product discounting in order to build their customer base. In January 2011, milk was used as weapon in the battle when Coles announced it would slash the cost of milk to $1 per litre; Woolworths swiftly followed suit. The pricing policy and buying power of the two supermarket giants was heavily criticised by a number of Australian dairy farmers, some of them recently claiming that most of the milk being produced was done so at a loss. The negative impact the price wars were having on the milk industry were undeniable.

In Australia, the price milk processing companies pay farmers for their milk is not regulated. However, the Australian Competition and Consumer Commission (ACCC) is vigilant and conducts investigations when appropriate. In April 2014, Coles had to issue corrective statements and provide a court-enforceable undertaking to the ACCC, following representations it made about the impact of Coles’ retail milk price reduction on the average price paid to dairy farmers for supplying milk to processors. An outlook on the Australian dairy industry, impact of recent changes and opportunities While Australia’s milk production (9.2 billion litres of milk in 2012/2013) represents a relatively small proportion of the global milk production, Australia remains an important player in the international trade market with the dairy export industry worth $2.76 billion in 2012/2013, representing about 7% of the world dairy trade. The Australian milk market is still quite fragmented with approximately 90% of the milk production being divided amongst 6 major players, Murray Goulburn, Fonterra, Lion, Parmalat, and Warrnambool Cheese & Butter and Bega Cheese. Dairy farms are essentially family-owned and small-scale. While New Zealand remains ahead of Australia in terms of milk production and export to Asia, Australia has capacity to produce more with an average annual milk production per cow of 5,525 litres. The booming demand for dairy products in Asia and the shortage of dairy products in China due to the increasing demand for dairy products and the shortage in local milk production, reinforced Australia’s position as a strategic supplier in the APAC region. The consumption of dairy products in China more than tripled in the last 10 years. Milk powder remains the key driver of the changes in Chinese consumption, with whole milk powder increasing sixfold and whey powder imports increasing by more than 60% between 2008 and 2011.

26 France-Australie - Agribusiness: a sprouting field of opportunity

The growing consumption of dairy products in Asia has given Australian producers the opportunity to diversify their supply channels, particularly in the context of the Australian supermarkets price war. While the milk price war has certainly shaken milk producers, the long-term contracts recently signed by Coles (5 year deal with Norco and 10 year contract with Murray Goulburn), and Woolworth (10 year contract with Fonterra, 10 year contract with Parmalat and 7.5 year contract with Brownes Dairies) could contribute to increase the level of confidence amongst processors and farmers and could lead to new investments in infrastructure, equipment and technology to increase production capacity.

“ Australia remains an important

player in the international trade market with the dairy export industry worth $2.76 billion in 2012/2013, representing about 7% of the world dairy trade.

The volatile commodity market and the uncertainties around the recovery of the global economy have put some pressure on the dairy industry worldwide, including on the Australian dairy industry. However, the Australian market may benefit from new trade agreements and foreign investments, thanks to its regional ties with Asian countries. Significant opportunities for the Australian dairy industry in Asia include the export of live cattle to China, the new cold chain ‘pipeline’ to China (which reduces the time it takes fresh Australian milk to reach Chinese consumers to 7 days) and the development of spray drying plants and other innovative facilities for milk processing. New local opportunities have also emerged from the recent changes in the Australian dairy industry. For example, a number of milk processing companies that offer specialist products such as permeate free milk, have benefited from the milk price war. The negative publicity has also, to a certain extent, encouraged consumers to show their support to farmers by buying more expensive farmhouse milk. This is encouraging for specialist processors and niche producers locally and internationally.

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France-Australie - Agribusiness: a sprouting field of opportunity

28 France-Australie - Agribusiness: a sprouting field of opportunity

AUSTRALIAN AGRICULTURE: LOOKING TO ASIA A SUSTAINABLE AGRICULTURE VISION FOR AUSTRALIA Richard DICKMANN

Head of New Business Development BAYER CROPSCIENCE

Bayer: A sustainable agriculture vision for Australia It is now accepted that Australian agriculture is destined to play an important role in addressing global food security. Demand for Australian food could triple current production in future decades. And, at the same time, climate variability, resource challenges and increasing community expectations will put pressure on production systems. Bayer believes the principle of sustainability offers a roadmap for farmers and the industry to address these challenges and meet consumer expectations. Alongside its innovative technologies and solutions that help increase yields, strengthen crop resilience and improve food quality, Bayer has commissioned a series of targeted community and environmental monitoring programs to demonstrate its commitment to the sustainable development of Australian agriculture. These initiatives seek to balance economic growth, social equity and environmental protection in equal measure. Economy: Innovation to offset economic challenges Australian agriculture must compete on the world market in an environment of variable exchange rates, protected markets and import competition. Bayer is committed to introduce world class innovations to ensure Australian agriculture remains globally competitive. Between 2006 and 2014 Bayer will have launched nine innovative crop protection active ingredients meeting changing production needs. Movento®, for example, is an insecticide which has an innovative “two-way” systemic mode of action. Movento controls resistant sucking pests throughout the entire plant and is also selective of most beneficial insects. It is therefore well suited to sustainable production systems. Crop breeding is another sphere of investment. In 2014, Bayer opened a $14 million Wheat and Oilseeds Breeding Centre at Longerenong, employing a team of experts fully dedicated to breeding and crop development for Australia. In 2012 Bayer introduced the new hybrid canola variety IH50RR and more varieties with improved yield, production traits and oil quality will follow. Furthermore, Bayer and CSIRO are global partners in wheat traits research, seeking higher yields and tolerance to drought, temperature and salinity stress. Finally new vegetable varieties from Bayer CropScience Vegetable Seeds provide a differentiated offer for farmers to the local and export food markets.

With these innovations Bayer believes it can help strengthen Australian agriculture by delivering added value along the entire value chain. Environment: New technology for a variable climate Australian farmers have long managed their farm environments through climatic and economic cycles. The future is one of greater climatic challenges and community expectations, as expressed through increasing food chain requirements. Bayer is working with growers and industry partners to develop solutions to help Australian agriculture adapt to these new environmental challenges. In 2012, Bayer partnered with three companies to develop a sustainable integrated pest management (IPM) system for broccoli and cauliflower. The highly selective insecticide Belt® is used in a program with the beneficial insect Diadegma semiclausem and biological insecticides. This system reduces costs, chemical use rates, spraying time and pest resistance risk. The system is highly appreciated by farmers and the food chain which was reflected by Bayer’s 2012 Australian Business Award for Innovation and Bayer being named one of BRW’s top 50 innovators in 2013. The introduction of the herbicides, Sakura® and Precept® has also made major contributions to the Australian environment by controlling resistant weeds in the critical minimum tillage agriculture system, which protects soil and carbon, and captures and retains vital moisture. Water quality in the Great Barrier Reef Marine Park is the target of “Project Catalyst”, a cooperation between Reef Catchments, Coca Cola and WWF, supported by Bayer. Society: A commitment to rural communities The lack of young people entering agriculture is amongst the most important social issues facing Australia. Sophisticated modern agriculture depends on the supply of up to 2000 graduates per year, but Australian universities graduate only around 800. Bayer has chosen this as its key societal focus. Interest in science and agriculture starts with the young and, as such, Bayer sponsors the CSIRO CarbonKids program. This program has reached 272 schools and 15,000 students using the topical climate variability subject to drive an interest in science. Bayer also sponsors the CSIRO Summer Student Program which gives 20 second and third year undergraduate students the opportunity to conduct real research beside highly qualified CSIRO plant scientists.

France-Australie - Agribusiness: a sprouting field of opportunity

AUSTRALIAN AGRICULTURE: LOOKING TO ASIA A SUSTAINABLE AGRICULTURE VISION FOR AUSTRALIA Finally, young adults must be supported to make the transition from graduate to committed professional. In 2013 Bayer and the Future Farmers Network (FFN) supported six young professionals to attend the Global Youth Ag Summit in Canada. These young professionals will develop their passion to empower young Australian agriculturalists and assist in a noble effort to feed a hungry planet. Sustainability is not a concept, but an imperative for Australian agriculture. Bayer believes that sustainability as a business principle offers a framework for the agricultural industry to address climatic, environmental and societal challenges. Through its Australian sustainable development program Bayer is helping to advance Australian agriculture, thereby delivering on its global mission – Science For A Better Life. Breeding a better future for Australian agriculture The Bayer Wheat & Oilseeds Breeding Centre located at Longerenong College (near Horsham, Victoria) is the first of its kind in this country. Bayer’s aim is to develop new wheat and oilseeds varieties with higher yields and productivity for Australian farmers so that they can become even more efficient and more sustainable and thus contribute to enhancing world food security.

the Horsham Rural City Council. These partnerships will continue to enhance opportunities for the local community and for the agricultural industry in the Wimmera region and in Australia. As the Centre is located at Longerenong College, it will provide students with unparalleled opportunities to gain experience at a world-class plant breeding facility. The facility will therefore directly help address the shortage of skilled labour evident in Australian agriculture.

The Bayer Wheat & Oilseeds Breeding Centre, Longerenong, Victoria

Strengthening no-till agriculture When harvested, broadacre crops (such as wheat, barley and oats) leave behind stubble that is traditionally burned or ploughed in. Minimum tillage agriculture involves a reduced number of soil cultivations prior to crop plantings. No-till agriculture is the extreme version, whereby the seed is planted into untilled soil and the stubble of the previous crop is essentially left undisturbed. The benefits of minimum or no-till farming are many including: more efficient rainfall capture, thereby maximising soil water; reduction in the loss of soil organic carbon; maintenance of soil stability and reduction in wind and water erosion; and reduction in soil cultivations resulting in less diesel consumption. In recent years, however, the minimum tillage system has faced a serious threat with the spread of herbicide resistance of key weeds.

Dr Jacqueline Applegate, Managing Director Bayer CropScience ANZ, The Hon. Hugh Delahunty and The Hon. Peter Walsh cut wheat plants to reveal the plaque and officially open the Bayer Wheat & Oilseeds Breeding Centre.

The Breeding Centre covers 5 ha in total and includes more than 300 m2 of glasshouses and 400 m2 of screen houses. The site is connected to the Wimmera Mallee Pipeline network providing a secure water supply to help ensure annual breeding outcomes regardless of the climate. The Centre contributes to Bayer’s global network of wheat and oilseeds breeding stations as one of seven sites throughout the key markets of Europe, North America and Asia. Up to 20 full time employees and up to 40 casual employees will work at the Centre in future. The Breeding Centre was developed in partnership with the Victorian State Government, Longerenong College, Workco Ltd, Wimmera Development Association and

Sakura herbicide has superior activity in high stubble minimum tillage systems, improving water use efficiency, soil health and yield.

Resistance can only be managed with the adoption of Integrated Weed Management (IWM) which includes alternative product choice and increases cropping system resilience. After years of development, Bayer CropScience released Sakura, a pre-emergent herbicide that has an excellent fit with a no-till farming approach and will help broaden its widespread adoption. Sakura controls herbicide-resistant annual ryegrass more effectively

30 France-Australie - Agribusiness: a sprouting field of opportunity

than existing products in this market, thus helping to ensure the sustainability of zero tillage systems. Sakura provides robust weed control in situations with up to 50% ground-cover, and requires minimal soil disturbance for incorporation. These environmental benefits make Sakura an ideal part of the solution to the environmental challenges faced by Australian agriculture. The product is now widely adopted across Australia’s wheat growing regions. Collaborating for a better future Bayer’s partnerships with local research institutes and funding bodies create new technologies with direct application in Australia and elsewhere in the world. Research partnerships form an integrated part of Bayer’s global research efforts and Australia’s large research base is an excellent source for world-class agricultural innovation. Bayer’s Australian research and funding partners include the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and Horticulture Australia Limited (HAL). Bayer and CSIRO have had a close collaboration for more than 20 years. One example of the results of this collaboration is cooperation in the development and global marketing of FiberMax® cotton which is now one of the world’s leading cotton varieties. Similarly, Bayer has cofunded ground-breaking research into “gene silencing” technology which is widely adopted around the world. Both these technologies earn royalties for Australia and are excellent examples of innovation for global markets, supporting further research and development in Australia. In 2009, Bayer signed a long-term agreement with CSIRO to fund research in cereals.

Bayer has collaborated closely with HAL in the area of minor use product registrations and supporting strategy and innovation workshops. In 2013, Bayer became the first corporate member of HAL, underlining the company’s long-term commitment to the development and growth of Australian horticulture. Bayer's membership will help promote discussions on new technologies and marketing concepts in horticulture to solve key issues facing Australian agriculture.

John Lloyd, CEO of Horticulture Australia Limited and Dr. Jacqueline Applegate, Managing Director Bayer CropScience ANZ celebrate Bayer’s HAL membership.

France-Australie - Agribusiness: a sprouting field of opportunity

THE AGRIBUSINESS INDUSTRY TRANSFORMATION AND INCREASING CAPACITY Gaétane Potard

Senior Research Analyst AUSTRALIAN FARM INSTITUTE

Australian Farm Institute was set up in 2003 to conduct research into strategic issues facing Australian agriculture, and to promote the outcomes to policymakers and the wider community. Since its creation, how the institute have been influential for Australian agriculture? For French readers, it’s maybe important to know that Australia doesn’t have the equivalent – in size at least of the National Institute of Agronomic Research (INRA). Research & Development is mostly organised around the different commodities, meat and livestock or grain or cotton. So, more than 10 years ago, when the Australian Government started to think about setting up a national policy linking carbon emission and agriculture, there was not a lot of data and coordinated research on the matter. The Australian Farm Institute (AFI) filled that void and became a leader in both understanding international and national science and policies on the matter. The AFI’s farm carbon calculator, accessible on our website, is still used to conduct workshop clarifying the real meaning of carbon emission on-farm. The corresponding research plaid a strong role in showing the risks and scientific flaws around including too quickly the farm sector in a carbon tax system and also help to do it in a scientific manner when it was need (the former Carbon Farm Initiative). The AFI built a reputation as a credible and independent research organisation specialised in a good understanding and analysis of public policies, far from political fights. This allowed us to have support to conduct research, both from private and public stakeholders. Our more recent work on the restructuring of the Australian agricultural R&D system, proposed by the Government in 2011, led the reviewer – the Productivity Commission – to challenge its view. The proposed restructuring, consisting in a merge of the different R&D Corporations but mostly a simplistic budget reduction, didn’t go ahead. The work we did on the quality of the agricultural statistical system received much interest by both the Agricultural Minister and the Australian Statistician. They consequently decided to start a review.

We have also just completed an important research on the future of extension (‘développement agricole’) for the grain sector, which will be directly used by the main organisation in charge of R&D and extension in the Australian Grain Industry. All this work take months or even years, so we also try to be involved in the fast spining public debate. Our quaterly Farm Policy Journal and Newsletters offer short analysis of ‘topical’ issues. For a while now, our two yearly conferences have now been fully booked with most of the industry leaders and key policy-makers and the topics discussed are often included in the work program of partners and people who attend. Australian Farm Institutes objective is to enhance the economic and social wellbeing of farmers and the agricultural sector in Australia. The country is currently experimenting one of the driest years since a century and local Farmers are facing serious problems of water supply and extreme drought in some areas of NSW and Queensland. How would you define the current farmers’ situation in Australia? The current economic environment of the agricultural sector? If you look at the big picture, mainly using ABARES broadacre data, average farm cash income has remained steady, and even recently increased in Australia. The total volume of output has doubled in the last 40 years. Australian agricultural sector is one of the three first world exporter of beef, one of the fifth exporter of grain and oilseed and a net exporter of most agricultural commodities. When you look at it in more details, it is indeed slightly more complex. The long drought of the years 2000 did impact the sector and to some extent did speed up a restructuring process which started with the deregulation of the nineties. Some commodities were more impacted than others by those changes and had to face different markets at the same time. Wool for instance was almost forced into deregulation when facing an increase and hard to fight competition with the synthetic fibre sector, 20 years after the size of the wool sheep herd shrunk, quality has increased and farmers have diversified toward lamp production. Other sectors have been striving due to technical innovation, like

32 France-Australie - Agribusiness: a sprouting field of opportunity

the cotton sector which increased its productivity thanks to biotechnology. The 2013/2014 drought did impact some farmers in the eastern states, mostly in Queensland and NSW, but it’s too early to say whether this will have a long lasting impact on Australian agriculture. Agriculture in Australia is known as a risky business and some farm managers have really learnt how to best manage those risks. Dealing with this high level of risks, with little or no government support is the daily job of Australian farm managers. That’s why it’s very important for them to maintain the trust and the confidence of investors and buyers.

“ Average farm cash income has

remained steady, and even recently increased in Australia. The total volume of output has doubled in the last 40 years.

„

Each year the Institute’s Research Advisory Committee identifies a small number of strategic issues, what are the main issues regarding the agribusiness industry in 2014? This year we are mainly working around trade competitiveness, animal welfare and better funding systems for agriculture. Next year, we would like to do more work on the productivity challenge, ‘big data’ and supply chain costs. What have been the main structural changes within the Australian agricultural sector during the last 10 years? What will be the main challenges and opportunities for this particular industry in the next 20 years? The last 10 years have seen the completion of the deregulation processes started in the 90s impacting wool, meat, dairy and horticulture. Each of these deregulations were followed by gradual changes in the way each commodity sectors was organised, commercially and professionally. All those changes were not totally completed when the drought of the 2000s came along. So to greatly summarise, it’s possible to say that the wool sector has clearly lost its leading position in Australian agriculture and the dairy sector went through tough times. The grain industry has seen a fair amount of consolidation of its supply chain.

Another key change in Australia is the fact that most policies impacting the future of agriculture are now decided at the federal level, not the State level. The Water Act 2007 put the environment before the economics and has set up a complex, but unified, system to deal with the water markets in most of Australian states (except Western Australia and the Northern Territory). On the other side, as shown in our latest research report on agricultural advocacy effectiveness farmers ‘groups are still organised around ‘commodities’ and ‘states’ and need to adapt. This also showed that the French ‘chambre d’agriculture’ are actually a very interesting asset in the current context. Looking at the next 20 years, the challenges for Australia are similar to the ones in the rest of the world: maintaining productivity and innovation at the highest level and optimising the way risk is managed. It appears that communicating and listening the expectations of the community, not only the consumers, will also be key to maintain the social license to operate. During the past years, agribusiness analysts have noticed a real potential for Australian agribusiness through the Asian Market. Regarding the expansion of Asian middle class, how do policy makers take advantages of this sector’s opportunities? In terms of productivity how farmers manage to respond to the Asian demand? There has been a lot of talk about this for the last few years. The former Government’s paper, Australia in the Asian century, and the recent focus of ABARES Outlook Conference on this issue brought together interesting data and comments, but unfortunately, there is no easy and obvious role for the government in this matter, a part probably from the one of consolidating ‘brand Australia’ and enabling free-trade. Australia recently signed free trade agreements with Korea and more recently Japan, with some clear benefits for some agricultural sectors, and some disappointments for others. But it appears that international consistent agreements on free trade for agriculture are not anymore on the agenda, partially due to the lack of will of a few influential nations. In this context, Australian policy-makers have to find other way to maximise Australian agricultural capacity. First the current R&D and Extension (R,D&E) sector have to be seen at the centre of any future Australian agricultural strategy. Secondly, the ‘quality’ advantage of Australian agricultural products have to been guaranteed and promoted.

France-Australie - Agribusiness: a sprouting field of opportunity

THE AGRIBUSINESS INDUSTRY TRANSFORMATION AND INCREASE CAPACITY Regarding the climates changes, population growth, Australian dollar… How Australia is facing the local issues to remain competitive in the international primary markets? What are the Australia’s strengths terms of productivity, know-how and innovation in the competitive landscape? In the grains and oilseed sector, Australia is moving pretty fast in creating and implementing new technologies. In the livestock sector, the situation is more diverse, but genomics and definitely contribute to lift productivity. The quality of beef and lamb marketed and exported has also evolved and there is space for a lot of improvements. The dairy sector is really at the forefront of innovation, both in term of pasture management, genetics selection and milking technology.

“ In the grains and oilseed sector, Australia is moving pretty fast in creating and implementing new technologies.

„

Most Australian broadacre farmers are early adopters of technology. If there is any weakness in the innovation system at the moment, it is probably due to a relative slowdown in R&D investments and the need for even more effective business models to manage risk. The apparent small size of the Australian markets shouldn’t blur out the fact that most of the leading farms in Australia have a considerable bigger size than most farms in the world, and there is a lot to gain in investing in agricultural technology and farming in Australia. In June 2014, Australian Farm institute is planning to organise a Mid Year conference about funding’s agriculture future, what is the main objective of this conference? Who will be attending? Australian agriculture is at an exciting point in its history, with the potential of a period of rapid expansion confronting the sector, driven by the emergence of growing numbers of middle-class Asian food consumers with a taste for safe, high quality food. However, realising this potential will require significant capital investment to lift farm productivity, and also to overcome the limitations imposed by ageing public infrastructure and a post-farm food processing sector that faces significant

capacity constraints arising from an extended period of underinvestment. The Australian agribusiness sector is also of limited size, and subject to major weather-driven fluctuations, making it a difficult investment environment. The Australian Farm Institute’s ‘Funding Agricultures Future’ conference aims to bring together experts from the agriculture sector both in Australia and internationally to discuss the potential future investment needs of the sector, and to consider potential models that may be available to achieve the required investment and growth. AFI’s conferences attendee are essentially agribusiness leaders from all agricultural sectors as well as senior policy makers, representants of farmers ‘groups, banks. This particular conference is aiming at attracting a wider range of people including the Australian and overseas finance and investment sector. In 2012, Australian Farm institute released a journal entitled “Can Australia become the food bowl of Asia”? What were your main findings? Could you tell us a bit more about the dynamics of Australian involvement into the Asian market? Do you think Australian Agriculture is strong enough to maintain its position as the first food supplier of the Asian market? That Journal was the result of the annual ‘John Ralph Competition’. The winning article put the emphasis on the topical role that innovation will play at all level of the different agricultural supply chains. A following newsletter, published in May 2013, outlined the findings of the AFI regarding this question. It appears that Australia’s bigger risk is to rest on its laurel and to believe than being close to Asia is enough to guarantee a bright future. It seems than other competitors like Brazil, Canada and the EU have always taken the Asian challenge very seriously and have found many ways to overcome the slight ‘distance’ disadvantage they may face. Australia can and has to remain at the forefront of cost competitiveness while at the same time being able to secure access to the more demanding Asian middle class.

“ Australia can and has to remain at the forefront of cost competitiveness while at the same time being able to secure access to the more demanding Asian middle class.

34 France-Australie - Agribusiness: a sprouting field of opportunity

„

As the co-editor of the Farm Policy Journal, your winter 2014 publication deals with 'Will the demise of the Australian food processing sector have a negative impact on Australian agriculture?’ Could you explain the factors that highlight this demise within the Australian food processing industry? Which actors of the agribusiness industry are the most impacted? In a medium run, how Australian Farm Institute could support the Australian agribusiness industry? In a long term perspective, what are your future projects in this particular sector? First AFI’s perspective on the processing sector is really the one of the farming sector. The Australian Food and Grocery Council is the industry body dedicated to those issues, but there is no equivalent of the AFI within this sector. This Journal will be released at the end of May 2014, but I can already tell you that most papers agree with the known findings that the current high dollars, labour costs and the fragmented approach to free-trade has resulted in Australia becoming a net importer of processed food. With my French background I also think that Australia’s history and relation to food is very different from Europe. The notion of ‘terroir’ doesn’t make much money or sense here, except when it comes to a few European products. On paper Australian farmers is producing enough raw material to feed ’60 millions’ people, but practically it can only supply the ‘raw material’ which in most case cannot be consumed immediately. Australia is food sufficient, but its food processing sector is facing much harder international competition than its agricultural sector. Don’t forget that it’s not like in France, both sectors are not strongly attached with much more farmers’ cooperatives or interests in food processing in France than in Australia. Problems faced by the food processing sector in Australia are not neutral because ‘processing’ is a key to access some specific markets and secondly, although not an important issue yet, having a certain level of control over food processing is important to guarantee food safety. But as I said, most of the food products primarily consumed by Australian are still produced and processed in Australia. The AFI is certainly very keen in doing more research into this question and is happy to develop collaboration on this matter in 2014/2015.

France-Australie - Agribusiness: a sprouting field of opportunity

AUSTRALIAN AGRIBUSINESS EXPORTS to France have increased by 80% in 2012

THE AGRIBUSINESS INDUSTRY TRANSFORMATION AND INCREASE CAPACITY Kerry Watts

Managing Director GROWTH AG

Growth Agriculture (Growth AG) is a well known player in the fertilisers industry in New South Wales and Queensland since its foundation in 1992. Could you introduce us to your company and its evolution during the last 20 years? Growth Ag began operations in 1992 as, primarily, an importer of a range of products that was focused on Integrated Pest Management. With significant funds and manpower being assigned to R&D it quickly developed a respected name as a company which was prepared to put its money where its mouth was and look at innovative technology that the Agricultural industry would benefit from in the future. Sustainable agriculture, clean green and environmentally acceptable agricultural practices have always been at the forefront of the company's philosophy. Growth Ag developed into a manufacturing company and has a facility in regional Queensland that produces the vast majority of its range of products. The plant has been gradually expanded over the years and is now capable of making a wide range of products from liquid fertilisers and liquid suspensions to spray adjuvants. Growth Ag also provide toll blending services.

“ There is no doubt the agriculture industry has changed over the last 20 years and Growth Ag remains committed to its future.

„

R&D has remained a key focus of Growth Ag Few companies spend as high a percentage of their turnover and profit on R&D as Growth Ag. In particular their research into replacing traditional sources of Nitrogen in crops has lead to a decrease in the reliance on expensive fossil fuel based fertilisers and their partnership with the Cotton Cooperative Research Centre led to the development of a new plant based insecticide that is going through the APVMA registration process as we speak.

There is no doubt the agriculture industry has changed over the last 20 years and Growth Ag remain committed to its future. We believe that agricultural production in Australia will continue to be a significant source of Australia’s income earning potential and that the Australian agricultural sector will continue to require innovative methods of production to retain its viability. Australia is a global agricultural power, feeding more than 60 million people every year in proteins. The Australian fertilisers industry is therefore particularly dynamic and innovative to help Australian farmers’ maintaining their profit margins or raising their production capacities. How would you describe the fertilizers industry market in Australia? What are main opportunities and threats for this particular industry? The Australian fertiliser market is heavily dominated by a very few large manufacturers and distributors of commodity fertilisers like Urea. In many respects there is almost a monopoly on the supply of these traditional synthetic fertilisers to Australian Producers. It is virtually impossible for small companies like ours to compete in that market when even some of the larger international companies find it difficult to compete. However, we believe there are opportunities for companies like ours to add value to products and offer viable alternatives to the synthetic commodities. Alternatives sources of nutrition have been proven cost effective, efficient and beneficial in many other ways and it is in this space that companies like Growth Ag can offer real value to the Australian farmer. Without a doubt we believe the biggest threat to the fertiliser industry in Australia is the current reliance on synthetic fossil fuel based nutritional sources. We must, as an industry, support and develop alternatives and it should, and is by Growth Ag, seen as an opportunity to increase productivity and long term viability.

France-Australie - Agribusiness: a sprouting field of opportunity

THE AGRIBUSINESS INDUSTRY TRANSFORMATION AND INCREASE CAPACITY Growth AG has developed an extensive range of products thanks to dynamic R&D capabilities and a strong emphasis on sustainable and environmentally acceptable agriculture practices. What are the latest innovations and new fertilisers provided by Growth AG in Australia? Our flag ship Nutritional product – Growth B&B: liquid Blood and Bone, has been manufactured and available on the market for a decade or more here in Australia. It is this product that much of our R&D into alternatives for traditional nutrition sources has focused. Whilst successful, manufacturing capability always limited sales and production. Over the last 2 years we have developed a brand new manufacturing technique that allows us to expand our production capability almost infinitely and also eliminates much of the variability that is inherent when dealing with products based on organic material like Blood and Bone. The new product has been re-branded B&B Flow Fine: Liquid Blood and Bone and is in production right now.

“We believe there are opportunities for companies like ours to add value to products and offer viable alternatives to the synthetic commodities.

„

Now in partnership with its sister company, Innovate Ag, Growth Ag will also be bring an exciting new insecticide product to the market. Sero – X (formerly known as Plant X) is an innovative step in the development of environmentally responsible pest control for the Food and Fibre Industry in Australia and across the world. It will be an APVMA (Australian Pesticides and Veterinary Medicines Authority) registered pesticide. The product is formulated from a plant that exhibits insect pest behaviour modification (semiochemical) and insecticidal properties and will minimise damage by a range of insect pests in a number of target fibre and food crops. Growth Ag is an importer, wholesaler and manufacturer of a unique range of products heavily focused on foliar nutrition and Integrated Pest Management (IPM) in crop production. Recently, a few French companies have been interested in the Australian fertilisers market, whether mineralized or organic fertilisers, and are looking for national importers. What are the

main opportunities for these fertilisers’ exporters in Australia? What are the most attractive products for the Australian agriculture? We believe there are fantastic opportunities for organic or mineralised products, we ourselves are always looking for new products and with our current focus on Liquid nutrition are on the lookout for a solid fertiliser that fits our company philosophy. Products marketed here must be cost effective though, a ‘green label’ does not provide an opportunity to increase the sales price. There are too many synthetic alternatives and producers are under significant cost of production pressures. If the products cost the same as the traditional alternative then you have a good chance of convincing the growers to switch, but if they are more expensive you have little chance. Having said that there is a growing community of producers who know they need to invest in their long term soil fertility. Regarding the last decade and current agricultural situation, what have been the main structural changes within the Australian agricultural sector during the last 10 years? And how would you describe current agricultural sector in Australia? The mergers and acquisitions of large International chemical companies into each other decreasing the number of suppliers has certainly changed the structure at the top end. In the cotton industry particularly, one Genetically Modified Organism (GMO) supplier has an almost entire monopoly. This gives producers little choice and we believe this is dangerous for our sector but we hope there will be change over the coming years. The single biggest structural change over the last 2 decades has been the move from small family owned farms, to either large family owned operations or their takeover by large corporate farms. This has changed the dynamics of the industry considerably. We would describe the agricultural sector as relatively buoyant but with a number of challenges. Regarding increasing Foreign Investment in the agribusiness industry, what is Growth AG point of view of this foreign attraction for Australian agriculture? Do you believe this is an opportunity to further develop Australia as “the Farm of Asia” or conversely is it a structural threat for national producers’ activities? Providing foreign investment is well balanced it should be a positive for Australian agriculture. It is important that we do not ‘sell off the farm’ and that control of Australia’s assets remains within the ownership of businesses paying taxes in Australia.

38 France-Australie - Agribusiness: a sprouting field of opportunity

Australia is currently experiencing one of the driest years in a century and local Farmers are facing serious problems of water supply and extreme drought in some areas of NSW, Queensland, South Australia and the Northern Territory. What are the main threats for these farmers? How does this impact the local fertilisers industry?

Australia is a dry country and in the irrigation areas particularly the water systems must be managed appropriately. This means a balance between environmental, agricultural and mining usage. A threat on the minds of many farmers at the moment is the competitions with the mining sector for manpower, water resources and the land use itself.

Water supply is and will continue to be a major concern, supply of all agricultural products is impacted by adverse weather conditions but fertilisers perhaps most of all. In good rainfall years it is often nutrition that is the limiting factor on yields and quality, in those years it makes good business sense to spend money on fertiliser. In years when water availability is the limiting factor on yield and quality then fertiliser sales will drop off a cliff. We believe that by supplying products that can be tailored to the crop specific water conditions we can help producers maximise their profitability.

Australian agriculture is highly sensitive to the value of the Australian Dollar, due to the extreme dependence to international trade activities (two thirds of the production is going abroad). Australian dollar has been getting weaker and weaker since the last few months, have you noticed a real change for farmers in terms of competiveness and profitability? It is difficult for us to comment on this specifically, in general terms it has been obvious that there has been a small increase in on farm income, however, this has been offset to a degree by the increase costs of inputs especially traditional synthetic fertilisers.

Choose the right path We are looking for dynamic, like minded companies, to assist in bringing new technologies and concepts to Australian agriculture ● Australian owned family company established in 1992, based in Wee Waa, North West NSW. ● Manufacturing facilities at Goondiwindi, South East Queensland. ● Manufacture a unique range of products designed to assist Australian farmers improve production,whilst taking due care of the land and environment. ● Heavily focused on developing organically based pest control and nutrition products. ● Involved in developing a plant based insecticide which was an outcome of the Cotton CRC and is aimed at controlling a range of insects in cotton and other crops. 77a Rose Street. WEE WAA NSW 2388 Ph: 02 67953787 Fax: 02 67953707 ABN: 98 849 457 234

Free Call: 1800 440 438 www.growthag.com.au info@growthag.com.au France-Australie - Agribusiness: a sprouting field of opportunity

FOOD PROCESSING IS THE BIGGEST INDUSTRY WITHIN THE AUSTRALIAN MANUFACTURING SECTOR.

FOCUS CHINESE INVESTMENT IN AUSTRALIAN AGRICULTURE KEY FIGURES By 2050, over 60% of the world’s demand for agrifood will come from Asia and China is one of the largest foreign investors in Australia agricultural sector and world’s largest food importer. Chinese has invested over USD 50 billion into Australia economy through direct investment across many sectors in the past six years, with an accumulated value of USD 1.05 billion invested in the Australian agricultural sector.

CHINA : MEGA-TREND

7,7% 2nd

• Chinese investment in Australia's agriculture (2006-2012): $1,048,16 USD millions (only 2% of total chinese investment in Australia)

largest economy after

GDP GROWTH IN 2013

• Changing diet and food consumption • China is one of the largest foreign investors in Australia’s economy.

1,5 BILLION

USA

2030

BILATERAL TRADE OPPORTUNITIES

• Australian Agri-food exports to China 2010-2012 2 000 000 1 800 000 1 600 000 1 400 000 1 200 000

>20%

food & fibre exports

year-on-year

BILLION

1 000 000 800 000

INCREASE

1st

ranked food & fibre export market

600 000 400 000 200 000

or oil dr ie d C ot C ru to st n ac ea ns D Fr ai es ry h & Fr fro Fis es ts ze h n G & la ra f m r pe oz b s, e fre n b ee Ra sh f o w hi r dr de ie d s & sk Li in ve s La bo no vi ne lin O an ffa im lo al fr s ed m ea t Su ga r W he at W in e W oo l

itr us

fru

it,

fre

rle

0 fa ts

2010 2011 2012

Australian agribusinesses need capital partners to co-invest in Australian primary production and integrated food processing industries to realise economies of scale.

5 MAJOR COMPLETED AUSTRALIA – CHINA AGRIBUSINESS DEALS

• A selection of major completed Australia-China agribusiness deals (2006-2012) Chinese investor company

Australian company

State

Industry

Year

Value (million USD)

Bright Food Group

Manassen Foods

NSW

Food Logistics

2011

500,00

China national cereals, oils and foodsttuffs Corporation

Tully Sugar

QLD

Sugar

2011

146,00

Shandong, Jining Ruyi Woolen Textile Co., Ltd

Cubbie Group Ltd

QLD

Cotton

2012

277,00

Beidahuang Grouvp

Dennis Joyce's family companies

Crop farming

2012

23,00 (est.)

Ferngrove

Tianma Bearing Co.

Vineyard

2012

15,5

France-Australie - Agribusiness: a sprouting field of opportunity

DISTRIBUTION & SUPPLY CHAIN CHANNELS THE INTERMEDIATE DISTRIBUTION CHANNELS Julien HEMARD

Managing Director PERNOD RICARD AUSTRALIA

How long Pernod Ricard Australia has been operating? How would you describe the performance in the local market? Pernod Ricard Australia was formed in 2006 and is responsible for the Pernod Ricard brand portfolio, whilst Pernod Ricard Winemakers focuses on the production of Pernod Ricard’s global wine portfolio. Over time, Pernod Ricard and Pernod Ricard Australia have developed a unique portfolio of premium wines and spirits in the Australian market. Looking at recent figures for the financial year-to-date, total wine volumes have increased vs. 2013. We have also seen solid results across our priority spirits Absolut, Chivas Regal and Jameson, which are growing ahead of the market.

Can you tell us a bit more about the recent purchase of wine and spirits and the rationale for the acquisitions? It seems like a few big players are involved in the Australian spirits industry, would you qualify this industry as oligopolistic? We are constantly exploring new product ideas to evolve our offer in the Australian market. Consumers sit at the heart of our business and play an incredibly important role in the development of any new product or campaign, ensuring it is the right fit for the market.

Pernod Ricard Australia is distributing wines and spirits, how would you describe the relationship between customers / retailers in Australia? How does Pernod Ricard react to pressures of prices from the big retailers of the industry?

In April, we added two new products to our portfolio in the Australian market, Avión and Lillet. Avión is an ultrapremium tequila that aims to bring a renowned offering into the market, which is currently dominated by one main player. Lillet is a French aperitif wine-based product. Produced near Bordeaux, this product is made from 85% wine and 15% fruit liqueur. It’s a perfect option for female drinkers, which can be enjoyed neat over ice or as a cocktail base.

We pride ourselves on our relationships with customers and retailers. Our partnership approach is a fundamental part of the success of our business in the Australian market.

Both of these premium products provide an excellent opportunity to tap into new areas of the Australian wine and spirits market to broaden the opportunities for the Australian consumer.

We believe that it is important to bring our customers and retailers on our journey, therefore we regularly engage them on our projects, NPDs and activations. This allows them to understand more about the development of the product, consumer insights and the history/heritage behind the brands.

How would you describe the current wine and spirits industry in Australia? What are the Strengths? Opportunities? Threats? Challenges for the next 5 years?

“ We believe that it is important to

bring our customers and retailers on our journey, therefore we regularly engage them on our projects.

„

Australia is a fast developing market with plenty of opportunities for businesses to grow and expand their offering. Strengths The Australian market provides strong economic fundamentals, an attractive lifestyle/environment and is also open to discover or create new tastes, trends and experiences. Opportunities There are many opportunities for our business in the Australian market, including: • Whilst Australia is the second wealthiest country in the world on a per capita basis the trade market is under in terms of premium categories, hence the strong growth prospect

42 France-Australie - Agribusiness: a sprouting field of opportunity

• Continuing to expand our offering with new premium and innovative products • Building a stronger presence in the on-premise to bring the brands to life • Using digital to better connect with our consumers Threats Alcohol misbehaviour remains to be a risk to our business. However, one of our key focuses is ensuring we promote responsible drinking amongst our audiences so our products can be enjoyed safely and in moderation. Challenges Every business comes with its challenges and three of two areas for us include: • Constantly innovating to stay ahead of competitors and anticipate/ create trends • Positioning premium brands as a long-term drinking trend – the trend of drinking less but better is set to continue In terms of final retailing and consumption, how would you describe the Australian consumer habits? Have you noticed changes regarding the Australian consumer behaviour? Consumer trends are constantly emerging, changing and evolving. Four of the key areas we are honing on in our business include: • Cocktails The cocktail occasion continues to gather pace in the Australian market. For us, it provides even more exciting ways to enjoy our products. For example, at this year’s Australian Open we served a Jacob’s Creek Cool Harvest cocktail called Centre Court Cooler. • Innovation Consumers are always looking to explore new products, new tastes and new experiences. Therefore, providing new innovative products to excite consumers is key. • Trading up We are seeing a higher demand for premium products as people spend more on their purchases. This puts our unique portfolio of premium wine and spirits in an excellent position.

In what way is the Australian market attractive for French companies looking to invest in the market? There are many reasons why the Australian market is attractive for French companies, including: • The sociable and creative lifestyle • The strong and growing economy • Great working environment with a business friendly government What are the next objectives for Pernod Ricard Australia? Have you identified new business targets? What is your business strategy for the next 5 years? Our business strategy is focused on two key pillars: ‘premiumisation’ and ‘innovation’. We have the most complete and premium portfolio in the industry. A big part of our engagement comes from our partnerships with key events in the Australian calendar, including: Formula 1, Melbourne Cup Carnival and Australian Open. These enable us to boost our consumer engagement and drive sale for our customers.

“Our business strategy is focused on two key pillars: ‘premiumisation’ and ‘innovation’.„ What is Pernod Ricard Australia’s advantage over its main competitors?

competitive

Innovation helps to give us that leading edge. We are constantly challenging the way we do business, exploring new territories and creating quality products that take us to new heights. An example of one of our most recent projects is the launch Absolut Oz, a truly unique and collectable bottle. This was developed in collaboration with the iconic and visionary film director Baz Luhrmann.

• Story behind the brand Consumers are now looking for more than just a great product, they want to understand the brand’s identity and explore its heritage and values. We find that this can give a product the leading edge against its competitors. For example, Jacob’s Creek recently unveiled its new brand identity and launched the third Open Film series with Andre Agassi to drive brand connection and engagement globally.

France-Australie - Agribusiness: a sprouting field of opportunity

DISTRIBUTION & SUPPLY CHAIN CHANNELS CONSUMER GOODS & FINAL RETAIL Jean-Yves HEUDE Managing Director CHESSMATE

Is Australia an opportunity for French Consumer Goods ? When you arrive in Australia and ask about the opportunity to develop a Consumer Goods business, everyone will tell you immediately that it is hardly possible because of the Grocery environment. Why ? For 2 main reasons: ● The imbalance of power, due to the duopoly of Woolworths and Coles representing more than 80% of the market, ● The commercial aggressiveness that has been developed since 2008 after the Coles acquisition by Wesfarmers. Is it really true ? Even though the market share of the 2 Majors is real, their actual balance of power is under serious pressure due to 3 key reasons: ● Their financial performance is very high (eg: Woolworths EBIT is 7.5% which is the highest in the world) and it is a challenge to keep beating these results quarter in quarter out, especially as the market is mature with low single digit growth, ● Woolworths and Coles have no fundamental differentiation in their store concepts (size, ranging, layout, service, etc), and in a large majority of the locations, the 2 stores are next to each other, all that meaning that it is hardly possible to develop high loyalty. Actually, only 4% of Australian only shop in one of the 2 chains, ● Aldi and Costo have entered the market very successfully, with a highly differentiated concept, and still have plenty of geographical expansion in front of them. This means that, despite their huge market share, they face a high risk to lose thousands of shoppers very quickly to their main competitors if anything goes wrong in their operations, like not having any of the loved brands on shelf. This is their Achilles heel. Although the 2 Majors have been using much more aggressive negotiation tactics in the last 5 years, it is fair to say that those tactics are largely inspired by the European model, and more specifically the UK model. Actually, the management of the 2 Majors is now mainly populated with European leaders, and hundreds of other people in the middle management have come from the main English chains. Therefore, the solutions to cope with this new aggressive environment are the same as what Manufacturers do in Europe. On that particular topic, having worked in France as well as the UK, and

although everyone considers that the UK Trade is the most challenging one, it is fair to argue that the French Trade is even more difficult to deal with. Consequently, an experience with the French Trade is a great competitive advantage when dealing with the Australian one. Beyond the Grocery challenges, Australia and NewZealand (ANZ) have a very small population (26 mil people is the same as Benelux in Europe), which makes it hardly possible to have products made in ANZ using technologies requiring high Capex. In other words, this creates large opportunities for importations of those products.

“Australia represents a great

opportunity to export for French Consumer Goods Companies due to the Consumer evolution, especially for products with uniqueness and requiring large Capex

„

Although the traditional image of the Australian around a BBQ is still true, the evolution goes to more sophisticated food, partly driven by very successful TV programs like Master Chefs. In this general trend, French food has definitely a role to play. As an example, the wines category is experiencing steady growth in a country traditionally dominated by beer, as it reflects a search for refinement. Another example is the yogurts category, experiencing high single digit growth, and being still very far away from the size of the French category. Last but not least, the Australian dollar remains strong, despite a recent decline, and consequently makes importations reasonably competitive. Overall, Australia represents a great opportunity to export for French Consumer Goods Companies due to the Consumer evolution, especially for products with uniqueness and requiring large Capex as long as the commercial approach is built in line with the European concepts.

44 France-Australie - Agribusiness: a sprouting field of opportunity

Proudly presents the

2014 TOUR DE FRANCE LUNCH

Thursday 19 June 12:00 - 3:00pm Ballroom Sofitel Sydney Wentworth

AGRIBUSINESS FUTURE & OPPORTUNITIES OPPORTUNITIES FOR FRENCH COMPANIES Paul MCGAHEN

Chief Executive COFACE Branch in Australia

How long COFACE has been operating in Australia? How would you consider the Australian market for COFACE? Coface first entered the Australian market through a managing agent in 2000. Coface branch in Singapore acquired the trade credit assets of the managing agent in 2004. In 2005 Coface Services (Australia) Pty Ltd. was granted an ASIC AFSL license allowing us to market our trade credit products directly and via brokers. The Australian Prudential Regulatory Authority (APRA) granted Coface in Australia local insurer status on 1 July 2008. Although Australia is a mature market in terms of Trade Credit Insurance, the penetration is quite low (5-10%) compare to European countries (40%). Trade Credit Insurance ensures businesses that sell on credit are covered for their debts in case of a buyer’s insolvency or due to non-payment. If managed properly, this product also allows businesses to explore new markets and increase sales with greater peace of mind.

“In 2013/14 export markets played

a significant role in the Agribusiness sector, accounting for almost 20% of sector revenue.

„

Due to the current economic environment, industries that can significantly benefit from the use of Trade Credit Insurance include manufacturing, agricultural and pharmaceutical, among others. According to Paul McGahen, Chief Executive of Coface Branch in Australia, the sector with the greatest expansion potential is among exporters. “I’d always advise someone exporting for the first time, or expanding off a small export base, to give trade credit insurance some serious consideration,” he says.

Agribusiness is currently among the most dynamic industries in Australia, benefiting from a lower Australian dollar and labour costs to regain competitiveness. What is COFACE’s reply to these market opportunities? Coface credit insurance provides simple and straight forward protection against customer default. This protection is available to a broad spectrum of industries but there are particular synergies that we see between our current position in Asia and the Agribusiness sector. In 2013/14 export markets played a significant role in the Agribusiness sector, accounting for almost 20% of sector revenue. The Agribusiness sector along with other export focused sectors in the Australian economy is forecast to benefit from the expected economic and population growth in the Asia pacific region. This expected growth will increase the importance of some of our key export markets such as China, India, and Indonesia. Our global network, standardized wording, international collections and dedicated risk underwriters allow our insured clients to pursue these lucrative market opportunities. In the Asia Pacific region, Coface has a direct presence in 12 countries providing unique local expertise and insight into the often opaque credit risk of export buyers. Additionally, in the event of non-payment, our full collections services provide an avenue in foreign markets to pursue payment that might otherwise be difficult or uneconomic to recover. COFACE has recently enhanced its organization by creating Coface Global Solutions, a new service for multinational companies, could you tell us a bit more about this service? Coface Global Solutions has been designed specifically for the management of large multinational clients. We work for them centrally with key management functions including Program Director, Program Risk Manager and Program Servicing Manager; while also working locally with operational functions including Account Manager, Risk Underwriting contact and Claims contact. In summary, multinational clients secure their international sales development and improve their operating performance.

France-Australie - Agribusiness: a sprouting field of opportunity

AGRIBUSINESS FUTURE & OPPORTUNITIES OPPORTUNITIES FOR FRENCH COMPANIES COFACE offers companies around the globe solutions to protect them against the risk of financial default of their clients, both on the domestic market and for export. Which sector of agribusiness is most affected by payment problems? What are the most important risks for this sector?

Coface has recently sponsored finalist companies, working in the agribusiness industry, for the Australian Export Awards, Can you let us know what are the key success factors regarding these companies? (Atron Enterprises, Berton Vineyards Pty Limited, Byron Food Science, ICT International )

The agribusiness sector is large and diverse but there are a number of industries that we consider sensitive to changes in the performance of the agriculture industry. These industries include chemicals and fertiliser manufacturing, agricultural biotechnology, agricultural machinery manufacturing, agricultural supplies wholesaling, and agricultural services.

Coface is a proud supporter of the Australian Export Awards which honours the success of local companies in their exporting operations and the contribution they make to the Australian economy.

The diversity of the agriculture sector, different regional characteristics and variable seasonal conditions, affect the sector to varying degrees, resulting in different performances in the broad acre industries. The major current risk that affects farm production and broad acre industries in Australia is the climate and weather conditions, where many regions in Australia have been affected by drought for example. However, there are other factors that create financial pressure on the agriculture industry. The sector is also affected by the commodity prices volatility, high farm debt, declining farm equity, due to reductions in land value, and exchange rate fluctuations. In addition to these risks, exporters are also exposed to country risk and the business climate in export markets.

“The major current risk that affects farm production and broad acre industries in Australia is the climate and weather conditions.

„

What are the main pricing factors impacting Australian agribusinesses industry? As with all industries, prices at both ends of the supply chain will impact the agribusiness industry; ie increased cost of raw materials, production and labour costs, volatility of commodity prices, currency fluctuations, over/undersupply and demand, changes in government regulations etc inevitably affects the industry in one form or the other.

Key success factors include: • The degree of innovation in the marketing strategy • Export growth achieved and the ability to sustain that growth • Sustainable competitive advantage • Value and contribution of exporting to business expansion • The overall company commitment to international business Can you tell us about your current activities in Australia? What are the main projects for COFACE in 2014? What are the most attractive sectors in the country? Coface in Australia will follow our Group’s strategy to achieve the status of being the most attractive trade credit insurer in the world. To be attractive would imply a strong brand favoured by and appealing to clients that will help generate profitable growth. To achieve this, we will be focussing on 3 core pillars that will support our growth ambition that is Industrialisation, Innovation and Business Development. Industrialisation means for us to increase operational efficiency and providing reliable customer service. To control well the service we render to our clients (brokers and clients). Innovation is to be first in class to innovate in the field of trade credit insurance. We are not focussing on diversification, but rather to differentiate ourselves from our competitors, through product enhancements, amongst others. Business development, to achieve strong growth supported by our innovation and industrialisation. Coface assists businesses - regardless of their business sector, size or location – as they grow within their own country or overseas. To achieve this, Coface offers credit insurance solutions that aim to protect businesses against the risk of financial default by their customers, allowing them to operate in a safer environment. Any business selling on credit should consider credit insurance irrespectively of the sector they belong. We are seeing business growth particularly in the manufacturing, agricultural and pharmaceutical sectors.

48 France-Australie - Agribusiness: a sprouting field of opportunity

AGRIBUSINESS FUTURE & OPPORTUNITIES OPPORTUNITIES FOR FRENCH COMPANIES Agnès Baekelandt-Dagoneau Pacific Area Director ANDROS PACIFIC

Andros has been operating in Australia for only three months. Could you tell us a bit more about your setting-up there? What have been the main difficulties, challenges and opportunities during these last few months? We effectively created our Australian branch 3 months ago, but we have been present in the market for more than 4 years thanks to a local strong partner, distributing our Bonne Maman Conserve brand. The success of Bonne Maman, as well as a few private labels contracts, have motivated us to set up a dedicated branch in the area. I have not faced specific difficulties since I arrive. Australian people, as well professionally as personally speaking, are highly welcoming. Relationships code seems much easier than in Europe, and it is really helpful. Maybe the only difficulty for any French professional in my situation: the time difference with European interlocutors and the necessity to be connected nearly 24 hours a day if we don’t want to loose time in the projects management. My main current challenge is to understand the different markets I am targeting, and to identify the priorities … because the opportunities are so various and numerous… What were the main reasons to open a subsidiary in Australia? How would you consider the Australian market for Andros ? What is your business strategy in Australia? Australia, as well as South Pacific territories (New Zealand, New Caledonia, French Polynesia), were really hard to manage from any other part of the world. We have sales office in USA, Uruguay, China or Vietnam, but none was close enough to explore all opportunities here. And the worth of being inside the market is inestimable. Australia has an interesting dynamism, and a wonderful food culture. Our Italian and French frozen desserts can have all their chance here, as their quality is up to best standards, and they are not competing with Australian desserts. We even think about launching our Trifle products, manufactured in Somerset (UK), as the British heritage is omnipresent here but we did not find any in the Australian market. More over, knowing Australian fruit-focused consumption habits, we think that our leading position in the fruit transformation industry can allow us to play an interesting role.

“Australia has an interesting dynamism, and a wonderful food culture.„ As for our business strategy, we are addressing retail, foodservice and industrial customers .. and working on 3 very different know hows (fruit-based products, frozen desserts, Pierrot Gourmand confectionery). For each pair market/know-how, I have to assess the opportunities. 3 months are not enough. We are now aware that there is a strong preference for Australian made products here and we totally understand this statement. This is vital for Australia and we don’t even try to go against it. So we decided to identify the segments on which we are complementary with Australian existing offer. And we are open for any partnership opportunity. Our 60-years-old industrial experience can be useful. Are you considering the Australian market as a basis for your further development in Asia-Pacific? No, we are already very present in Asia. But I don’t exclude any common and bilaterally profitable projects. Andros is a global leader fruit processing company based in France who currently owns and operates 25 factories worldwide. Now your company has expended its business towards Australia. How would you describe the Australian food-processing industry? In what ways this food-processing market is attractive for French companies? It is difficult to have a relevant vision after 3 month… My feeling is that there is good raw material in Australia, but that the industrial know-hows are quite concentrated. In other words, there are a very limited number of suppliers for each kind of goods. Which is good news for import. Which above all gives ideas for a future potential industrial investment. On a shorter term view, I think there is a place for interesting partnerships, and that Australian dynamism, raw material, skills, will of industrial integration … can be very complementary with French industrial expertise like ours.

50 France-Australie - Agribusiness: a sprouting field of opportunity

What is the best way to successfully integrate this market? For me, it would be through BtoB and industrial partnerships. Our fruit based products can be very complementary to local activities, namely yogurt, ice-cream, beverage, as well as biscuits and pastry industry. Australia is one of the most productive agricultural countries in the world and an important supplier of primary products in Asia, thanks to the diversity of its climate and the variety of fresh products available. Are you planning to source some of your fresh products directly from Australian farms? Or are you planning to import and distribute your traditional product range from France to Australia and Asia-Pacific? We don’t have any short-term projects to source from here. But the fact of being here on a daily basis can typically lead to this kind of opportunity! For the moment, we are settling in with our products, i.e. with imports from France, as well as from many other countries were we have developed specific know-hows. In terms of long-term strategy, what are the key success factors of Andros in the Australian food-processing industry? And what are your objectives in the next 5 years in Australia? I think that the key success factors are the ability to provide Australian market with : • different products you cannot find here • complementary offers to local industries • qualitative items (in terms of taste, product and quality) • cost effective products. I think we have a position to take in Australian food industry landscape, and my mission is to do it the smartest way, in conformity with local actors, spirit, and way of doing business. My goal, for the next 5 years, is to build some strong, added-value oriented and sustainable local partnerships

France-Australie - Agribusiness: a sprouting field of opportunity

AGRIBUSINESS FUTURE & OPPORTUNITIES PERSPECTIVES Rob McConnel National Industry Leader Agribusiness DELOITTE

How long Deloitte has been operating in Australia? How would you consider the Agribusiness market for Deloitte? Deloitte established its Australian practice in 1891 and operates in more than 150 countries with around 200,000 professionals globally, all committed to a single vision; to be the standard of excellence. Our Agribusiness practice is continually adapting to the ever-changing landscape, driven by a combination of global and local pressures including food security, localised competition for natural resources, an ageing farmer population and cost pressures. The unique features of the Agribusiness sector mean that industry expertise is critical. Our national Agribusiness team extends across Audit and Assurance, Consulting, Corporate Finance, Corporate Restructuring, Digital Services, Forensic Services, Insolvency, Risk Services and Tax. We see the Agribusiness market in Australia as particularly strong. The third instalment of Deloitte’s Building the Lucky Country series: ‘Positioning for Prosperity’ identified Agribusiness as a super-growth industry in the enviable position of having the strongest Australian natural advantage matched by the largest global opportunity. Deloitte’s multi-disciplinary approach is designed to help our clients position themselves for growth and to deliver solutions that enhance operations and deliver measurable results.

Our proximity to the world’s fastest growing markets in Asia gives us further natural advantage coupled with an abundance of natural resources. However, despite these natural advantages our local Agribusiness community faces a number of pressures through decreasing profit margins, volatile commodity prices, seasonal conditions and relatively high regulatory burden.

“The Australian Agribusiness industry stands on the threshold of enormous opportunities.„ These challenges are not insurmountable, particularly for an industry that over the past 200 years has dealt with all of this and more and not only survived but prospered. Our current government is looking to tackle a number of the challenges head-on including the removal of regulatory burden which will reduce costs and promote efficiency within the supply chain. This will be supported by the continued evolution of Free Trade Agreements with our key trading partners in Asia which will further enhance our export market, particularly in the value-added area of the industry.

Australian experts are qualifying Agribusiness as “booming”. Do you agree with that? Could you give us an overview of the current Agribusiness industry in Australia? What are the current Strengths? Challenges? Opportunities and threats of this particular sector?

Australian dollar is getting weaker and that is excellent news for farmers in Australia who become competitive in the world primary markets. Do you see this dependency to Australian dollar as a weakness or a threat? What are the strategic objectives for the Agribusiness industry to remain competitive in the international primary markets?

Yes, overall I would agree, however, there are some key challenges which need to be addressed to achieve this potential. The Australian Agribusiness industry stands on the threshold of enormous opportunities; the world’s population is expected to grow by sixty million people a year over the next two decades and global food demand will increase alongside it. More importantly, income growth in emerging economies and key markets will increase kilojoule intake and prompt a dietary shift from grains and cereals towards meat, dairy, fruit and vegetables.

The strength of the Australian dollar has been a key factor in many sectors including Agribusiness. Deloitte Access Economics estimates that the Australian Dollar will settle closer to US$0.80 in the long run, which is an important development. However, the industry should not be dependent on the exchange rate to determine its success. Australia’s success should be aligned with branding itself as a sustainable and reliable food source and investment location. Australia has many natural advantages that it

France-Australie - Agribusiness: a sprouting field of opportunity

AGRIBUSINESS FUTURE & OPPORTUNITIES OPPORTUNITIES FOR FRENCH COMPANIES needs to fully utilise to achieve its potential growth targets and many initiatives we see in the private and public sector are focused to this end.

“The strength of the Australian dollar has been a key factor in many sectors including Agribusiness. „ Deloitte is very active in Agribusiness industry; would you be able to tell us a bit more about your current and future services, projects in Agribusiness? How these services could lead to an improvement of agricultural competitiveness in Australia? The issue of food security and supply/demand pressures will continue to drive interest in investment in the Australian Agribusiness sector as well as the consolidation of existing businesses. Cost pressures in the supply chain require an increase in competitiveness through rationalisation of a highly fragmented industry. These areas of transformational change in the industry are just one key area in which Deloitte is assisting our clients. Throughout the supply chain, the banking sector continues to be a key financier and supporter of the industry and a stakeholder with which Deloitte works closely with.

“The issue of food security and

supply/demand pressures will continue to drive interest in investment in the Australian Agribusiness sector as well as the consolidation of existing businesses.

„

Deloitte has a strong focus on regulatory regime and provides economic and regulatory assistance to policy makers and influencers. ‘Reforming Regulation of the Australian Food and Grocery Sector’ report, commissioned by Deloitte Access Economics for the Australian Food and Grocery Council, concluded that the current regulation of food and grocery falls well short of best practice and may be one of the poorest examples of industry regulation in Australia. Excessive red tape has been a major barrier to growth which needs to be reduced effectively whilst maintaining Australia’s strong public health and safety standards.

Deloitte regularly publishes Agribusiness reports. Your last publication mentioned that the Australian Government has commissioned a White Paper to boost agriculture’s productivity and profitability. Could you tell us a bit more about this government program? Its objectives? The ‘Agricultural Competitiveness White Paper’ aims to promote the development of a skilled workforce and increase farm gate returns. The white paper will set out a clear policy platform for realising the full economic potential of Australian Agribusiness by utilising its significant natural advantages. Challenges that need to be overcome include farm debt levels and debt sustainability, insufficient infrastructure, transport and service delivery costs and extreme weather conditions. The key objectives of the white paper are to identify policy actions that will capitalise on Australia’s strengths and create the right regulatory and economic environment for private sector investment and innovation. The paper will consider the adequacy of regulations affecting the sector and whether they promote or inhibit competition, investment, and private-sector led growth. The white paper will outline a clear strategy for implementing these policies to ensure agriculture remains a significant contributor to the economy and regional communities. Australia is currently experiencing one of the driest years since a century and local Farmers are facing serious problems of water supply and extreme drought in some areas of NSW and Queensland. What are the main threats for these farmers? Do you think Australian agriculture will recover or would have to adapt to climate change and change its practices? The prolonged nature of the drought has put significant financial and operating pressure on our farms. In the beef sector for example, operators have been forced to destock their cattle resulting in the highest slaughter numbers since 1978 recorded in 2013. Farmers felt the financial pressure as the increase in supply caused cattle prices to fall. However, as with a seasonal industry, the unwind of this scenario when the rain comes should see increased prices on reduced supply (through lower recent brandings in the drought and operators restocking). Seasonal variability will always be a factor within the Australian Agribusiness sector and our farmers and supply chain participants have shown an amazing resilience to this. Our farmers have always had to deal with such fluctuations and will continue to do so.

54 France-Australie - Agribusiness: a sprouting field of opportunity

â&#x20AC;&#x153;Seasonal variability will always

be a factor within the Australian Agribusiness sector and our farmers and supply chain participants have shown an amazing resilience to this.

â&#x20AC;&#x17E;

Lastly, what is the future of Agribusiness in Australia? What will be the main challenges and opportunities for this particular industry in the next 20 years? Business and government will need to take bold steps, especially in the next ten years as many of our biggest challenges hit home. Government has a critical role to play in improving international trade relations, industrial relations regulation, balancing environmental and business viability concerns and providing meaningful incentives to continue to attract and retain participants to the sector. One key issue the industry faces is the aging workforce in farming, with the average age of Australian farmers at 52 years old, exceeding the national average for other occupations by 12 years. The retirement of many farmers in the coming decade will result in skill shortages on a huge scale and significant capital inflows to fund this succession. Efforts need to be made to attract young people to this sector once more. Innovative solutions to improve productivity require funding; Australia must source investment in technologies and implement new policies and approaches to make us a world leader in producing value from semi-arid land. Finally, despite our close proximity to burgeoning Asia, much of our produce travels from farm to port on relatively inefficient roads, instead of by rail. Improving our transport mix and other infrastructure would greatly improve our competitiveness. Again, investment from business and government is required to improve the quality and quantity of infrastructure available to our Agribusiness sector, including roads, rail and ports which are also in demand amongst our resource sector.

France-Australie - Agribusiness: a sprouting field of opportunity

2014 CONFERENCES & EXHIBITIONS 2014 REGIONAL OUTLOOK CONFERENCES

Held across Australia, the seven Regional Outlook conferences bring ABARES commodity forecasts and analysis to regional Australia. At each conference ABARES economists will deliver commodity forecasts and research results, followed by a range of local producers, industry representatives and business people as well as meet and discuss issues relevant to your region. The conference program includes forecasts for key agricultural commodities, an economic overview, local challenges such as labour and water issues and case studies from regional business people who are taking innovative approaches.

CONFERENCE: FUNDING AGRICULTUREâ&#x20AC;&#x2122;S FUTURE 3 & 4 June 2014 Canberra

The Australian Farm Institute will be holding its mid-year conference in Canberra on the 3rd and 4th of June 2014. This conference brings together leaders in Australian agriculture and agribusiness and provides a unique opportunity to learn about and discuss the strategic issues shaping the sector.

AAA NSW AGRIBUSINESS BREAKFAST

21st May What investment barriers in road, rail and port investments undermined the Graincorp takeover? How does this affect future investments? Are there any reforms are on the horizon for investors? These questions and more will be addressed by Luke over breakfast

82ND IFA ANNUAL CONFERENCE

26-28 May 2014 (10/04/2014) The opening session will focus on Smart Growth: Promoting Effective and Efficient Fertilizer Use, and feature a panel discussion with international experts on nutrient stewardship and nutrient use efficiency.

FINE FOOD AUSTRALIA 15-18 September 2014

Fine Food Australia will return to Melbourne in 2014 Fine Food Australia is the largest gathering of international food, drink and equipment for the retail, food services and hospitality industries. Fine Food Australia is the leading trade event for the food industry that consistently delivers the widest and most relevant range of International and Australia buyers and sellers.

NFF NATIONAL CONGRESS 2014 20-21 October 2014 Canberra

Producing our Future' will see over 350 representatives from government, industry and the wider agricultural supply chain join together to explore core business, challenging viewpoints and blue-sky opportunities for agriculture at the grass-roots, Australian and global levels.

56 France-Australie - Agribusiness: a sprouting field of opportunity

REFERENCES ● Australian agricultural commodities statistics, 2013, Canberra, Australia ● ABARES 2014, Australian agricultural productivity growth: past reforms and future opportunities, 14.2, Canberra, Februrary CC BY 3.0

● Agricultural competitiveness White paper, Canberra, Australia ● Austrade, Agribusiness and Food Trade Opportunities in the Asian Century, March 2013, Adelaide, Australia. ● Austrade, Agribusiness research, consulting, technology and equipment, July 2013, Sydney, Australia ● Australian government productivity commission, Submission to the agricultural competitiveness taskforce, April 2014, Canberra Australia. ● Commercial exchanges France - Australia in 2012, "Economic Service of the Ministry of Economy and Foreign Trade, Sebastien PREVOST, March 9, 2013 ● Deloitte access economics repport. March 2014. ● Deloitte, Building the lucky country #3, 2013. ● Farm weekly, Opportunity for agribusiness 24 February 2014. ● KPMG and the University of Sydney, Demystifying Chinese Investment in Australia Agribusiness, October 2013. ● NFF Annual review, 2012-2013. ● NFF, Blue print for Australian agribusiness, 2013, Barton Australia ● NFF Farm fact artwork ● Rabobank, Agribusiness monthly, April 2014. ● Food processing is the biggest industry within the Australian manufacturing sector, June 2013

France-Australie - Agribusiness: a sprouting field of opportunity

NEWSROOM

JANUARY 6 - Air Liquide Australia Limited (ALA) today

announced that it has purchased Wesfarmers Chemicals, Energy and Fertilisers division 40 per cent interest in the Western Australian based industrial gas producer and supplier Air Liquide Western Australia (ALWA). Air Liquide Australia owns now 100 per cent of ALWA.

JANUARY 29 - Alstom appoints new

Country President for Australia & New Zealand. As Country President, Domenic Rotili will represent the Alstom Group throughout the region and will support and co-ordinate common strategies between Alstom’s Power, Renewable Power, Transmission (Grid) and Transport Sectors. He will hold the Country President position in addition to his existing role as the Head of Alstom’s Grid Sector for the pacific region.

FEBRUARY 11 - French mustard brand, Maille, has

opened its first Australian concept store in an affluent Victorian supermarket.

MARCH 23 - New research from professional services firm Deloitte has identified 25 sectoral hotspots, the ‘Deloitte Growth 25’ (DG25), with the biggest potential to lift Australia’s prosperity over the next 20 years. MARCH 26 - Champagne: Australia now is the world's

sixth largest importer! The champagne bubble simply refuses to burst. In 2012, Australians were the seventh biggest drinkers of the beverage in the world. Last year, we inched into sixth spot.

APRIL 8 - Sephora to open stores in Australia.

Sephora, the world’s largest beauty retailer, has spurned offers from Myer and David Jones to set up outlets in department stores and will open its first stand-alone stores in Australia next year.

APRIL 11 - SITA Australia today announced the

acquisition of M.A.I.L.S. SITA intends to invest in the next phase of M.A.I.L.S growth and believes the combination of the two companies will boost the company’s integrated service offering to mining companies in the Goldfields region.

APRIL 15 - TRANSDEV has launched its annual report /

corporate profile, Achieving Together 2013 - This is the second publicly released report that addresses Transdev company profile, their achievements, people, performance and how Trandev is stacking against its sustainability strategy for 2013.

APRIL 23 - Laurent Fabius meeting with Australian

MARCH 17 - BOUYGUES, Lend Lease Join Transurban

in Sydney Road Work. Bouygues SA, the construction and media conglomerate led by Martin Bouygues, and Lend Lease Group, Australia’s biggest listed developer, are set to design and build a A$3 billion ($2.7 billion) Sydney road project.

Foreign Minister Julie Bishop. Laurent Fabius, Minister of Foreign Affairs and International Development, received Julie Bishop, Australian Minister for Foreign Affairs. Our bilateral relations are excellent, we still want to develop. Australia will welcome the end of the G20. This will be a great meeting and on this occasion, the President will visit Australia the first by a French head of state.

MARCH 19 - MICHELIN Tyres at the 2014 Australian

Grand Prix Globally Michelin’s involvement with Carrera Cup is more than just supplying tyres; it is a technical partnership with designers from Michelin working closely with Porsche to develop a tyre that ensures the total performance of the cars on which it is fitted.

58 France-Australie - Agribusiness: a sprouting field of opportunity

PAST EVENTS

6 MAY

Australia’s G20 Presidency in 2014 The French-Australian Chamber of Commerce & Industry welcomed Agnès Espagne, Economic Counsellor at the Embassy of France to Australia for a business briefing focusing on the priorities and stakes of the Australian Presidency of the 2014 G20. Agnès Espagne gave an insightful overview of the G20 from a French perspective and shared her first-hand experience of economic policy, discussing the topics and issues that will be addressed during this year’s G20. Australia was appointed as Chair and hosting country at the G20 2011 in Cannes, France; and took over the presidency of the G20 on 1 December 2013. The Australian presidency will culminate with the hosting of the Leaders’ Summit to be held on 15 and 16 November in Brisbane.

Priorities for Australia’s G20 Presidency in 2014 Australia’s Presidency of the G20 has the ambition to come to limited but successful commitments. Its objectives are to closely tie the agenda items with global growth and employment including an increasing involvement of the private sector. The role of the national strategies to support growth and employment will be central as they will focus on identifying policy gaps country by country. The main priorities for the presidency are based on these national comprehensive growth strategies via the revitalisation of trade, investment in infrastructure, and fiscal cooperation to reduce tax base erosion and profit shifting.

Efficiency and ambition to achieve limited but concrete objectives The Australian G20 Presidency prioritises pragmatism and efficiency with a strict respect of the agenda, meticulous upstream preparation of the meetings, efforts to reinforce interactions between the two main working groups, the “Sherpa” and “Finance” pillars. Australia wants the Brisbane Summit to lead to a limited but concrete number of commitments that will be comprehensible for the general public. Australia has deliberately limited the number of meetings, especially the ministerial ones. It is therefore possible that a meeting of the Labour and Employment Ministers won’t be held. However, there should be a meeting of the Trade Ministers in July and a meeting of Labour Ministers in September, on top of the regular meetings of the Economy and Finance Ministers and Governors of Central Banks. The first one was held in February in Sydney, and the second one is planned in September in Cairns. Australia is also focusing on closely involving companies, via the Business 20 (B20), presided by Richard Goyder, CEO at Wesfarmers, who will host a B20 Summit in mid-July in Sydney. The Summit is expected to include participation of numerous CEOs of the G20 countries. During his speech at the World Economic Forum in Davos in January, Prime Minister Tony Abbott had strongly insisted on the contribution of the private sector to the economic growth and policies.

France-Australie - Agribusiness: a sprouting field of opportunity

PAST EVENTS Focusing the agenda on growth and employment The Australian presidency established the agenda based on the declaration of the heads of States and Governments at the Saint-Petersburg Summit in September 2013, and has proposed to focus on supporting growth, employment, and how to strengthen the world economy in anticipation of potential future shocks. The objective is to elaborate a G20 action plan benefiting from national strategies to support growth and employment, and to correct policy gaps. The entire Presidency’s work must be linked to the stimulation of growth by reinforcing the private sector, and consolidating the world economy. Prime Minister Tony Abbott listed the following key priorities:

• Energy. Australia, who should become the first LNG

exporter by 2017, could not ignore such a topic considering the energy consumption evolution in the next twenty years. The program goes from thoughts about the out-dated international energy governance, to a better organisation of the gas market, the continuation of work on energetic efficiency, and the suppression of subsidies to fossil fuels.

• Employment. The G20 Presidency has particularly

emphasised on the labour market, whether it is about women and youth unemployment or long-term unemployment. It also proposes to discuss safety and favouring quality jobs.

• The regulation and supervision of finance. The • The revival of world trade. It has to assist the overall Presidency will focus on the effective implementation world growth stimulation, and the Presidency wants to pursue the results obtained at the Bali Summit, even if the possible operational conclusions remain vague at this stage (consolidate commitments on freezing protectionist measures? Better integrate economies in the global value chains? Structure the bilateral, regional and multilateral negotiations? Liberalise the commerce of environmental goods on the APEC model?)

• Investing in infrastructures. This priority found a large

consensus among the member countries, whether they are developed or emerging economies. The debates will focus on the ways to revive investments in infrastructure with an increasing participation of the private sector; the establishment of a stock of viable projects; the sharing of good practices regarding Public-Private Partnerships; the enhancement of savings intermediation; the definition of the role of the public sector and multilateral banks of development.

• Fiscal cooperation, particularly to reduce tax base erosion and profit shifting (BEPS). The Australian

Presidency confirms its intention to pursue and intensify the work started by the previous G20 Presidency led by Russia, whether it deals with automatic exchange of information or with the establishment of technical assistance to developing countries in order to permit them to set up new rules. The taxation of the digital economy and its assets should also be discussed.

of the commitments made in the previous Summits. It is reluctant to open new topics and intends to complete the keys aspects of the core reforms in the following areas : building resilient institutions, ending too big to fail, addressing shadow banking risks and making derivatives markets safer. We think that the G20 should recognize that the work will have to continue beyond 2014. The Australian presidency also wants to link the agenda with the fight against corruption.

• Reform of the international financial architecture.

The Presidency has made the choice not to pursue the work surrounding the IMF. Nevertheless, it cannot completely leave behind this debate about reforming the IMF, even if it highly depends on decisions from the American Congress.

• Development. The three suggested topics by the

presidency are investments in infrastructure, the mobilisation of domestic resources, and financial inclusion. It also hopes that the G20 will be able to usefully contribute to the work of the United Nations on the post 2015 agenda. Finally, the Australian Presidency has chosen to point out topics reflecting its own domestic agenda and objectives such as growth strategies and investments, especially in trade and infrastructure. The association of the private sector is a pragmatic mirror of its way to promote and achieve national reform methods. Nevertheless, Australia’s Presidency will have, as per the past Presidencies, to compose with multiples and sometimes contradictory interests of member countries. For more information about the 2014 G20 please visit

www.g20.org

60 France-Australie - Agribusiness: a sprouting field of opportunity

26 FEBRUARY

NSW - Entrepreneurs Club Event - Meet the Serial Entrepreneur Jost Stollmann Clayton Utz hosted this seminar which was first of all the opportunity to listen to Serial Entrepreneur Jost Stollmann. The first part of the event was a motivational workshop for entrepreneurs. Alison Woolsey, Head of Business Strategy at Clayton Utz and Vice-President at the FACCI, kindly agreed to make the opening speech and introduced

our speaker. After a few words in French, our famous entrepreneur then presented his outstanding success story. He shared his personal story which led to the creation of Tyro, a new player in the Australian payment market. After the presentation, a short session of Q&A made for an interactive event and opened the debate towards other horizons. It was also an opportunity for our attendees to exchange a few words with our guest Jost. Patricia Michel, Vice-President Operations then closed the presentation with a thank-you speech. See more...

20 MARCH

NSW - How to set up a Business in Australia FACCI NSW was pleased to hold its first Business Event of the year: a workshop focused on ‘How to set up a business in Australia’. The aim of the workshop was to give an overview of Australia’s visa conditions, the legal structuring and associated corporate issues, chartered accountant, labour law and human resources management in regards to business creation and development. This event was a great success with more than 40 attendees. See more...

27 MARCH

FACCI General Annual Meeting The French-Australian Chamber of Commerce & Industry presented its 2013 activities, results and achievements at the Annual General Meeting, held Thursday 27 March in Melbourne. With a solid reputation as a dynamic networking platform the Chamber organised more than 100 functions, attended by a cumulated audience of more than 8,000 guests. see the annual report 2014...

7 APRIL

VIC - Big 4 Business Briefing Series: Culture & Advertising @ Maddocks The first Big 4 Business Briefing in Melbourne last night was a great success! The French-Australian Chamber thanks Russel Howcroft - Network Ten and Neale Cotton - The Lab Strategy for their fascinating presentations on Culture, Branding and Advertising. Thank you also to our members, guests and network for a fantastic turnout. We would also like to acknowledge the generous support from our kind host Damien Wurzel - Maddocks Lawyers (Corp Member), and our beer sponsors Boutique Alpine Brews. See more...

France-Australie - Agribusiness: a sprouting field of opportunity

UPCOMING EVENTS MAY 29 l VIC - Agribusiness Industry Forum The rising global demand for high-value food products combined with important local farming production makes the Australian agribusiness sector one of the main prospective growth markets in the country. However, some challenges remain to make Australia a world leader of this industy. Join us for a presentation and Q&A with an experts’ panel from executives of the industry.

JUNE 05 l NSW - Concours des vins du NSW Le Concours des Vins is a wonderful showcase of the diversity and styles of New South Wales wines with a total of 287 wines submitted from 56 wineries from all over NSW in 2013. It is the French-Australian Chamber’s most popular events and a must-attend for all enthusiastic wine and cheese lovers.

proudly presents

07 l QLD - P&C Exclusive Networking Thursday 5 June 2014 From 6pm - 9pm Doltone House, Darling Island Whard Pyrmont, Sydney

13 l VIC - The 'France' International Rugby Luncheon Tickets include a 3-course lunch and is a great opportunity to hear from Senior Representatives of the Australian Rugby Union (ARU) and Fédération Française de Rugby (FFR) prior the test match to be contested the following evening in Melbourne, and to network with members of French-Australian business community. Tickets to this event are reserved to members only.

13 l NSW - Patron Event CEO Club Luncheon

62 France-Australie - Agribusiness: a sprouting field of opportunity

18 l VIC - Big 4 Business Briefing Investing in Victoria The French-Australian Chamber of Commerce & Industry proudly introduce the Big 4 Business Briefing Series. This series of business seminars provides an opportunity for our members, network and guests to listen to a range of relevant commercial topics, with the participation of key Australian political and business figures. The Big 4 Business Briefing Series offers a valuable and unique networking platform, and is hosted at member's premises around the Melbourne CBD.

NSW Thursday 19 June

2014 TOUR DE FRANCE LUNCH

19 l NSW - Tour de France Lunch In association with the British Chamber of Commerce, we are proud to invite all cycling fans, Tour de France devotees and gastronomes to a very special Lunch to celebrate the start of the 101st edition of Le Tour de France.

26 l NSW - Networking event - The savoir faire of buying

JULY 11 l NSW - Bastille Day Champagne Apéritif

I AN

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14 l Bastille Day Celebration F

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14 N TS THE 20

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12 l WA - Bastille Day Champagne Breakfast 24 l VIC - Europcar Tour de France Lunch The French-Australian Chamber of Commerce & Industry invites you to the much-anticipated 2014 Europcar Tour de France Lunch at the Peninsula, Shed 9 in Docklands. Come to celebrate the world’s most famous cycling race, and appreciate the technical analysis by cycling experts whilst enjoying a four-course fine French menu, designed by chef Nicolas Poelart (Brooks of Melbourne). The French-Australian Chamber is delighted to welcome back hosts Gabriel Gaté & David Culbert who will be heading this fantastic corporate lunch experience. France-Australie - Agribusiness: a sprouting field of opportunity

MEMBERSHIP The French-Australian Chamber is a membership-based not-for-profit organisation offering to more than 700 members nationwide a unique opportunity to network and expand their business.

THEY PUT THEIR TRUST IN FACCI PATRON MEMBERS

CORPORATE MEMBERS

SMALL BUSINESS MEMBERS

WINE & DINE MEMBERS

Associated Translators & Linguists Australian Internships BBR Agency Brisbane French Festival Drink in Tube Education & Migration Services Australia Fiducia Pacific Gold Coast Bonjour French Festival Maestrano Pérenne Investment Socomec SSL Europa

A La Folie Cecconi's Four Frogs Crepes Gault & Millau Ladurée

64 France-Australie - Agribusiness: a sprouting field of opportunity

NETWORKING INDUSTRY KNOWLEDGE

CORPORATE EVENTS

BILATERAL TRADE SERVICES

BUSINESS LEADS BECOME A MEMBER

Simply visit www.facci.com.au or contact your nearest Chapter ADELAIDE

BRISBANE

MELBOURNE

PERTH

SYDNEY

BUSINESS SERVICES The French-Australian Chamber of Commerce and Industry offers a comprehensive range of services and communication tools to provide you with the necessary infrastructural support should you be looking to expand, find new commercial partners, or establish your business in Australia and France.

UCCIFE BECOMES CCI FRANCE INTERNATIONAL The Board of Directors of the UCCIFE ( Union des Chambres de commerce et de l’industrie francaise a l’etranger) and the Committee Director of CCI France decided to take a decisive step towards greater consistency and more readability of CCI of France network and French CCI worldwide. Brand and logo UCCIFE evolve declining the visual identity of CCI of France network. UCCIFE, non- profit organisation, continues to exist legally. But it is under the brand CCI France International that now continues its leadership role of representation, promotion and coordination of CCI French network in the world.

ROAD-SHOW

The French-Australian Chamber of Commerce & Industry will be in France in June for a series of presentations and individual meetings organised in conjunction with the CCI de France network to promote growing markets and opportunities in Australia. Olivier Deschang (National Coordinator) and Bertrand Cauvin (Business Development & Trade Coordinator) will be available to meet with French companies at the following dates and locations:

BUSINESS DEVELOPMENT MARKET RESEARCH BUSINESS LEADS DOMICILIATION MARKETING HOSTING 66 France-Australie - Agribusiness: a sprouting field of opportunity

Member of

Adelaide (SA Chapter) 229 St Vincent Street PO Box 212 Port Adelaide Business Center SA 5015 T. (+61 8) 8240 8309 F. (+61 8) 8447 8644 sa@facci.com.au Brisbane (QLD Chapter) Level 3, 370 Queen Street Brisbane QLD 4000 T. (+61 7) 3339 7016 F. (+61 7) 3003 0499 qld@facci.com.au Melbourne (VIC Chapter) Level 10, 155 Queen Street Melbourne VIC 3000 T. (+61 3) 9600 0000 F. (+61 3) 9600 0005 vic@facci.com.au Perth (WA Chapter) Level 24, Allendale Square 77 St Georges Terrace Perth WA 6000 PO Box 7506 Cloisters Square PO WA 6850 T. (+61 8) 6141 3384 F. (+61 8) 6141 3384 wa@facci.com.au Sydney (NSW Chapter) Level 1, 60 York Street Sydney NSW 2000 PO Box Q1553 QVB NSW 1230 T. (+61 2) 9279 4140 F. (+61 2) 9279 4142 nsw@facci.com.au