Don’t be left behind: Partner up to tap China

Nearly 6000 SMEs have taken the plunge and are now exporting to China and that number is expected to increase rapidly now the China Australia Free Trade Agreement is in place.

And with Australia’s strong reputation for ‘clean and green’ food provenance, many Australian SME primary producers are looking to seize this opportunity.

So as a small to medium Australian agribusiness, what can you do to turbo charge your business and ensure you can capitalise on the growth in China?

First, you need to be “export ready”. That means understanding your business, your competitive advantage and also your capability to supply the market you want to access.

Second, you also need a scalable business model. Orders from Chinese customers can be for significant quantities and they will have an expectation that you can continually meet these orders.

If your business has scale or scalability, it improves your ability to meet customer demand and it’s also more attractive from an investment perspective.

We know that partnering brings scale opportunities. 

One successful strategy to achieve this scale is to create a strategic joint venture or partnership with customers and investors.

A number of domestic and export producers have established joint ventures into specific agribusiness supply chains to increase their scale. This strategy can provide the customer with increased access to supply or preferred customer status and it also increases the ability to improve the product profit margin either through scale, value adding, vertical integration or improved distribution.

Partnering up also results in additional market and distribution channels for the product and allows the producer to control their destiny with product quality, relationships and markets.

Finally, it injects investment into the supply chain in critical areas such as infrastructure upgrades, new technology and innovation and new varieties and genetics.

Establishing a strategic partnership is an essential step in building supply chains to target export markets by creating scalable business economies.