South Australian SMEs in Global Supply Chains – What the South Australian Government is doing to support defence export, including entry into global supply chains. South Australia is a state focused on its defence future – and that future includes innovative, sustainable defence companies working from Australia’s Defence State to equip the Australian Defence Force (ADF) and other defence customers around the world.
22nd Jul 2011
South Australian SMEs in Global Supply Chains – What the South Australian Government is doing to support defence export, including entry into global supply chains.
South Australia is a state focused on its defence future – and that future includes innovative, sustainable defence companies working from Australia’s Defence State to equip the Australian Defence Force (ADF) and other defence customers around the world.
Exports, including supply-chain participation, provide an ideal adjunct to domestic revenue for South Australia’s small to medium-sized defence firms, and the returns can be lucrative. The state’s strong commitment to the defence sector and our history of winning and delivering major defence projects has resulted in South Australia now being home to 25 per cent of the nation’s defence industry. The sector currently employs nearly 5,000 specialist workers in South Australia and is projected to increase by an average 6.8 percent a year to 2013–14.
There are unique barriers associated with defence export, including specific protectionist markets and detailed customs and other export/import control procedures. Despite these challenges, the South Australian Government believes supplying into international markets and supply chains provides avenues for companies to diversify their revenue and product base. These avenues may be particularly attractive for smaller companies sensitive to the inherently cyclical nature of Australian defence procurement. At the same time, the barriers are also less evident for local businesses specialising in components or subsystems.
Through the Department of Trade and Economic Development (DTED), the South Australian Government offers dedicated one-on-one support for companies looking to export or enter local supply chains. Services include specialist advice relating to market-entry strategies, market intelligence and business matching; and a dedicated network of eight overseas representatives with a thorough knowledge of South Australia and local markets, and with access to other extensive market resources. South Australian representatives are located in key and emerging growth markets in Asia (Singapore, Ho Chi Minh City, Hong Kong, Shanghai and Jinan), India (Chennai), Chile (Santiago) and the Middle East/Gulf (Dubai).
New and potential exporters can access the state’s five specialist TradeStart Export Advisors, who through a joint initiative with Austrade are located in metropolitan and regional South Australia. These advisors take local companies from the initial enquiry stage to exporting activity, with individual coaching, mentoring, workshops and in-market assistance.
Financial support is available for eligible small to medium-sized enterprises that are preparing for export or looking to expand their export capabilities. DTED’s assistance includes its Gateway Business Program, which offers up to 50 per cent reimbursement for expenses incurred on marketing materials, third-party market research, website audit and modification, mentoring or coaching, trade show or mission participation and inbound buyer support. Companies must meet the program’s stated criteria and can access up to $20,000 over two years.
The South Australian Government also plays a proactive role in leading and managing defence trade missions, exhibitions and company visits to and from South Australia – all of which serve to identify opportunities for export and supply chain participation. In close connection with the Commonwealth Government’s Defence Export Unit and lead industry body, Defence Teaming Centre, Defence SA – the nation’s only dedicated state agency focused on defence issues – supports local defence industry participation in outbound and inbound missions aimed at identifying and pursuing business opportunities in key markets.
Over the past two years, the South Australian Government has facilitated two defence industry missions to India, as well as an inbound defence mission of 26 naval companies from El Ferrol, Spain (a leading naval shipbuilding region). South Australia will also host an inbound defence, aerospace and security industry delegation from India in late June, facilitated by its Chennai office.
These early exploratory missions are leading to commercial opportunities with a number of international firms that are expressing interest in forming joint venture partnerships with South Australian companies, particularly in the naval shipbuilding industry. Discussions are preliminary but promising.
South Australia’s holistic approach also includes joint government-industry participation at major defence trade shows in Australia, this collaborative South Australia. The Defence State presence serves to expose small South Australian companies to major global defence players.
Led by the Premier and the Minister for Defence Industries, the South Australian Government continues to build and maintain strong links with major defence primes around the world to secure further global supply-chain opportunities for local companies, across all defence sectors.
Through Defence SA, a number of opportunities are actively being pursued in the Joint Strike Fighter program, as well as with a number of other US-based prime defence firms aspiring to win major Australian defence contracts. Defence SA also collaborates closely with the Defence Materiel Organisation to assist South Australian defence companies leverage opportunities from the Australian Industry Capability Program and Global Supply Chain Program.
The Industry Capability Network, which in South Australia is based within DTED, also works to promote opportunities for local companies within major-project supply chains, including defence supply chains. Other DTED support for defence projects includes helping ensure South Australian business can supply developers with the knowledge-intensive services and high-value manufacturing capabilities it requires.
The Government of South Australia understands that small to medium enterprises, in particular, need support to diversify their customer bases, build relationships with key contacts including global primes, and develop sustainable market-entry strategies. There is much going on - and while there may be hurdles in the short term, the prospects for South Australian firms are significant and the state is in it for the long haul.
For more information on support for South Australian companies wanting to enter or expand their exporting initiatives, visit: www.southaustralia.biz/Exporting-from-SA.aspx or contact Defence SA on (08) 8463 7140.