Lost chances down under

BUSINESS VIEWPOINT ANTHONY BURNEY

Anthony Burney is an eminent City accountant and director of companies. He was a member of the Geddes committee which reported on the shipbuilding industry.

As one who has been visiting Australia regularly for over twenty years, I am very disturbed that we should have lost so much of our share of trade in such an important market, and that little effort is apparently being made to correct the downward trend.

Australia is a politically stable country, has a good record of industrial relations and has a steadily rising standard of living. Its population has risen over the last twenty years from about eight and a half million to nearly twelve million and it is believed that it will reach twenty mil-

lion by 1990. The GNP has risen by about 51 per cent per annum over the last five years, during

which period average earnings from wages and salaries have grown at somewhat over 5 per cent per annum. Australia has approximately one third of 1 per cent of the world's population, yet only the us, Russia, Canada and France export more raw materials. Mineral discoveries are continuing at an extraordinary pace and in about four years' time exports from this source alone should top $800 million; this compares with current exports of primary produce (wheat, wool, beef, etc) of about $1,500 million. There is no market in the world with a greater potential for growth.

The United Kingdom has always had a special relationship with Australia, and in 1949 we took 42 per cent of Australian exports and provided 50 per cent of her imports. Today, only 13 per cent of Australian exports come to the UK and we provide only 24 per cent of her

imports. But during the same period, Australian exports to Japan have risen from 1 per cent to

19 per cent and purchases from that country have risen from under half of 1 per cent of total imports in 1949 to 10 per cent in 1967.

Even taking into account that the Pacific trading area was always inevitable and has be- come a reality during the last twenty years, these figures present a sorry picture, particularly if one bears in mind the advantages with which the

UK industrialist began. What, then, ought we to do now if he is to stop the rot and begin to put the situation right?

First, I think that there are some general con- siderations. Australia is a vast continent in which one has to think in thousands, rather than in hundreds, of miles. It stretches from the tropical in the north to the temperate in the south. The differences in climate and the large distances that have to be covered mean that there are also different social conditions throughout the states and that great attention must be paid to the problems of distribution.

Second, there are the problems involved in supervising an operation 12,000 miles away. It can be done successfully only if regular visits are made, if suitable people are trained both in England and in Australia and if the most is made of the communications that are available. And in my view the most important factor of all is close and regular personal contact.

I do not believe that a UK industrialist will ever sell his goods successfully in Australia un- less and until he has been there personally. One

of the troubles is that even when people do go to Australia, they tend to allow far too little time for their visit. I often have people say to me : "It'll be quite enough if I am there for a couple of weeks, won't it?' Quite apart from the fact that it takes some days to recover from a long aeroplane flight, two weeks is hardly enough to get even a superficial idea of both Sydney and Melbourne.

It would be interesting to know how many UK companies that are operating in Australia today,

or are contemplating doing so, have had a full- scale market survey prepared for them—a survey that should cover not only the type of goods to be sold, and the areas in which the markets for such goods exist, but also where to set up distribution centres, depots, and so on.

If they are not to be a complete waste of time visits must be for an adequate period and properly prepared. It is no good just arriving in Australia and expecting to meet the people whom one needs to see and ought to talk to, particularly since the contacts should, if they are to be justified, be at a high level. A proper itinerary should be worked out in advance, the necessary introductions should be obtained and a considerable amount of time spent before leaving England ascertaining who are the right people with whom to discuss one's ideas.

For new visitors to Australia I think that it is important to do some preliminary reading. .I am not suggesting that they should learn the language thoroughly, although knowledge of a few simple phrases such as: 'I'm feeling a bit crook today—I think I've picked up a wog somewhere,' is very Useful. There are, however; a number of excellent and very readable book* such as Donald Horne's The Lucky Country. which give the intending visitor a good and valuable picture of the Australian way of life.

Too many UK industrialists who visit Aust tralia seem to be far more interested in their own problems than in those of the Australians.

For their part, the Australians feel that they have been treated for far too long as a market which would take anything not wanted at home: On what, then, ought the potential exporter to Australia to concentrate?. I- think there are four main factors: 1. Quality. Rightly or wrongly there is still a great deal of criticism in Australia of the lack

of quality of goods- which are-exported to them from the UK. I have even been told that goods received by an Australian subsidiary from its UK parent company deteriorate towards the end

of the parent company's financial year, at which time, it is said, the only criterion appears to be to push stuff through the factory doors at all costs. Quality in this context must include the suitability of a product as well as the excellence of its manufacture. Australia today has access to world markets, and if we do not give her what she needs, she will get it elsewhere.

2. Punctuality of delivery. Wherever one goes in Australia (and unfortunately often in this country as well) one hears stories of late de- liveries of goods. A delay in the delivery of a component may hold up bringing a whole plant into production and thus involve heavy expendi- ture.

3. After-sales service. Even a mediocre pro- duct with first-class after-sales service would, I believe, be more acceptable under Australian conditions than a first-class product with no such service. I doubt whether it is possible to give first-class after-sales service in a country such as Australia without a local manufacturing opera- tion which facilitates the provision of spare parts and makes possible a far higher quality of local supervision than could otherwise be available. It can also have considerable advan- tages in relation to government regulations or Australian fiscal or quantitative controls.

Even if they have alocal manufacturing unit, all but the largest companies will have to rely on agents in some states. I am afraid that far too many people still employ agents in Aus- tralia because they have been connected with them 'for fifty years:.

4. Finally, public relations. Good public rela- tions in Australia cap; I believe, be maintained only by regular contact at top level. If you do not visit Australia regularly and keep in touch with your friends and business associates there, they soon begin to think that you have lost in- terest in them. And it is essential that in between the visits as much contact as possible is main- tained. In Australia one often hears the view expressed that the average UK industrialist when he comes back to England forgets Australian problems completely under the pressure of his own. This is essentially a failure in communica- tions for which there is no excuse. Since the cable was completed, the telephone service is first class, quick and reliable, and should be used far more than it is by those who have problems to discuss with their Australian associates.

In this article I have stressed over and over again the importance of personal contacts with the right people in Australia and the necessity to maintain a close relationship with them. To help those who cannot have their own establish- ment, the 8NEC (or some other appropriate body) ought to sponsor a small team of people both in Sydney and in Melbourne whose job it would be to introduce to Australia and to Australians UK industrialists who had no other avenue of approach, and to help people to sort out differ- ences which might arise between their visits.

Australia is a country with an enormous future. In recent years we have increasingly failed to play our full part in its development, and we should take immediate steps to try to regain our position.