AusRAIL, Market Sectors

Trade mission makes inroads into Asian rail market

<span class="" id="parent-fieldname-description"> Trade missions are an effective way of exposing and promoting Australian SMEs to the global rail marketplace. Rail Express spoke with Australia’s rail supplier advocate, Bruce Griffiths OAM, to learn exactly what rail companies gained from a recent mission to Hong Kong and the kinds of opportunities that exist for our firms in the Asian market. </span> <p><strong>REX: Can you explain to readers the ‘ins and outs’ of the mission and its purpose?</strong></p><p><strong>Griffiths: </strong>The Asia Pacific Rail conference and trade mission took place in Hong Kong between 12-14 March 2013. The mission was a partnership between the Australian Government’s rail supplier advocate initiative, the Industry Capability Network (ICN) and Austrade, and led by myself along with ICN’s national sector manager-rail, Tony Carney. 13 delegates took part in this mission, covering a wide breadth of capability across the Australian rail industry from firms who specialise in innovative train fit outs and metal fabrication to those involved in complex rail communication systems.</p><p>I believe that trade missions are an important way to expose Australian SMES to international markets. It allows them to make a greater impact and increase their visibility in the global market through working amongst a team of Australian firms with the support of the Australian Government and the ICN. This gives them the opportunity to make a coordinated and targeted approach to our global customers.</p><p><strong>REX: How did the trade mission to Hong Kong benefit the delegation?</strong></p><p><strong>Griffiths: </strong>This mission not only&nbsp promoted Australian rail capabilities and identified global business opportunities for Australian rail suppliers, but also exposed firms to best practice manufacturing, provided insight into international supply chains and new competitive practice, and helped firms develop international partnerships. Through this mission, delegates now have a better understanding of some of the major upcoming rail projects throughout the Asia pacific region and how their business could achieve commercial success in this market.</p><p><strong>REX: What did the trade mission involve?</strong></p><p><strong>Griffiths: </strong>The delegation met with key players in the global rail industry, participated in briefings from large multinational rail companies, and attended site visits to some of Hong Kong’s most innovative railway projects. In particular, the delegation met:</p><ul><li>UGL Rail and TUV SUD Hong Kong to discuss Asian rail opportunities for Australian manufacturers.</li><li>MTR to discuss their current and future projects in the order of $100Bn HK, particularly focusing on projects where Australian rail manufactures could participate in these major projects’ supply chains.</li><li>CNR/CRC and CSR key players and strategic buyers to discuss opportunities for Australian companies in the Asian market.</li></ul><p>Along with these high level meetings and site visits, the mission included the team participating in Asia Pacific Rail 2013. This conference was host to over 270 senior delegates from across the international rail industry. It exposed the Australian team to some of the world’s leading rail companies and facilitated international collaboration and partnership engagements to help firms integrate into global supply chains. They learnt first-hand about multi-billion dollar projects coming out of Hong Kong, Thailand, India, Indonesia, Malaysia and Philippines markets in the next five years.</p><p><strong>REX: What kinds of insights into the Asian rail market resulted from the trade mission?</strong></p><p><strong>Griffiths:</strong> Securing business in Hong Kong and Asia more generally can be complex, time consuming, expensive, and risky. However, the Hong Kong business environment is somewhat easier than other regions in Asia. From the perspective of Hong Kong rail, MTR is the key player in the region. This makes it easier to understand the supply chain and pathways to market. Whilst the buyers are Chinese and therefore have the same cultural differences experienced when doing business China, MTR is a sophisticated buyer with a long history of British management, commercial and contract rules based on the English system and is familiar with buying in the global market.</p><p>Focusing on MTR in particular, MTR’s current and on-going focus is on making their rolling stock and station infrastructure more user and environmentally friendly for commuters. MTR has a global prequalification system, which can make it difficult to be noticed unless Australian companies have a stand out product at a stand out price.</p><p>However, MTR have a number of significant opportunities on the horizon. What’s more importance is that, coupled with these opportunities, they are cooperative and genuinely interested in learning more about the capabilities Australian rail business have to offer.</p><p>When MTR’s Hong Kong team hosted the Australian delegation, they informed trade mission members of their organisation’s upcoming and current projects and facilitated introductions with key strategic buyers. This type of ‘in-market’ access is invaluable for Australian suppliers and will significantly assist in improving their global competitiveness.</p><p><strong>REX: What kinds of business opportunities exist for Australian rail companies in the Asian market?</strong></p><p><strong>Griffiths:</strong> Asia represents some of the most significant rail business opportunities in the world. The estimated market value for rolling stock in the Asia Pacific Region for the next five years is $A53.4Bn for new procurement and $A44.0Bn for maintenance, representing a total of $A97.4Bn. China, Japan and Korea represent some of the largest investments in the region’s rail projects.</p><p>Opportunities exist for Australia, particularly in heavy haul rail and LRV (trams) as a pillar industry for Australia. Australia may also be able to supply niche products in selected industries.</p><p>Hong Kong is looking for new ground-breaking products and services. Australian firms already have an advantage in new technologies and innovation and thus could partner with Hong Kong in realising these capabilities.</p><p>It is crucial that businesses are prepared to work in an internationally competitive environment. We need to be flexible, resilient and diversify to take advantage of these opportunities. Australian industry has a fantastic international reputation – we are lean, green, innovative and offer quality. It is essential we draw upon these strengths and demonstrate why our international counterparts should do business with us. As the rail supplier advocate, I will assist firms who are willing and ready to take this leap.</p><p>For more information of trade missions, along with the various activities of the rail supplier advocate visit: <a href="http://www.innovation.gov.au/supplieradvocates" target="_blank">www.innovation.gov.au/supplieradvocates</a><br />Email: RailAdvocate@innovation.gov.au<br />For more information on ICN visit: <a href="http://www.icn.org.au" target="_blank">www.icn.org.au</a><br />For more information on Austrade visit: <a href="http://www.austrade.gov.au" target="_blank">www.austrade.gov.au<br /></a></p>