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Japanese Investment in
Australia
Updated 28 September 2012
Australia Unlimited
Agenda
• Recent Foreign Direct Investment (FDI) trends to
Australia
• Japanese investment in Australia
– From Japanese perspective
– From Australian perspective
• Austrade’s Investment attraction business model and
priority sectors
• Business examples
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Australia is a top destination for foreign direct investment
• Foreign direct investment (FDI) into Australia grew by
8.6% in 2012 to a record A$549.6 billion, following a
7.1% rise in 2011. This was more than double that of 10
years ago.
• Australia ranked as the world’s sixth most attractive
destination for FDI (A.T. Kearney’s 2012 FDI Confidence Index)
• The US and UK remain the most dominant direct
investors, making up a combined 38% of Australia’s FDI
stock. The EU remains Australia's single largest source
of FDI stock with a 28% share
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Stock of FDI in Australia by major markets
131,255
79,417
61,202
32,268 23,823 22,527 21,233
16,741
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
UnitedStates ofAmerica
UnitedKingdom
Japan Netherlands Singapore Switzerland Canada China
2009 2010 2011 2012
(A$ m)
Source: Austrade Benchmark Report, ABS
Japan is Australia’s third largest investors, stock increased 13.1% over 2011
to $61.2 billion
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FDI Stock in Australia
• Major Asian nations have been fast-growing sources of direct investment.
• Chinese FDI stock in Australia recorded a CAGR of over 45% in the five years to 2012. Chinese FDI stock now stands at A$17 billion. (3% of Australia’s total FDI stock)
• The first inwards FDI stock for India - A$1.2 billion
• Over the past five years, the fastest growing sources of foreign direct investment into Australia have been*:
– Luxembourg +25%
– Singapore +19%
– China +16%
– Japan +13%
– UK +13%
* Compound annual growth rate since 2007
Source: Australian Bureau of Statistics, International Investment Position, 2012 (released 2 May 2013)
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FDI into Australia by sector 2007-2011 - continues to
grow across major sectors
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2007 2008* 2009 2010 2011
+7.3%
Source: ABS
+13.8%
+16.1%
+13.9%
(A$ m)
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Japan’s Outward FDI (Level of Investment at End of Year)
$286,529
$237,800
$122,269
$94,444 $93,215
$61,344
$15,107
0
50,000
100,000
150,000
200,000
250,000
300,000
U.S.A. EU ASEAN Netherlands
China Australia India
2007 2008 2009 2010 2011 2012
(US$ m)
Source: JETRO Japan's Total Outward FDI by Country/Region (International Investment position)
Japan’s total outward FDI recorded over US$1,040 billion in 2012 (+8.6%).
Australia – 4th preferred destination
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Japan’s FDI in Australia
• Australia’s third largest investor with the total stock
values of $61.2 billion in 2012
• Approximately 11.1% of total FDI stock into Australia
• Japan’s FDI stock in Australia recorded a CAGR of
14.5% between 2007–2012
• Japan’s outward FDI to Australia accounts for 4% of
Australia’s GDP
• fDI Markets Report (2003-13) – top 5 Investment sectors:
Sector No of projects
Coal, Oil and Natural Gas 14 (11.7%)
Industrial Machinery, Equipment & Tools 13
Business Machines & Equipment 12
Communications 11
Financial Services 11
Total 120
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fDi Markets Report – Japan’s Investment in
Australia: Key Trends (2003-2013)
Company name No of
projects
Global
projects*
% of global
projects**
Toyota Motor 11 455 2.4
Fujitsu 6 107 5.6
Mitsubishi
Corporation 5 315 1.5
Inpex 4 9 44.4
Sumitomo
Group 4 232 1.7
Yokogawa
Electric 3 15 20
NEC 3 85 3.5
Marubeni 3 50 6
Sumitomo
Mitsui
Financial
Group
3 40 7.5
Sekisui House 3 7 42.8
• 120 FDI projects
• The largest number of projects
was announced in 2009, with 20
projects
• 67 Japanese companies invested
in Australia, out of a total 43,099
companies investing in FDI
globally
• Top 10 companies accounted for a
combined total of 45 projects
(37.5%)
*Total number of projects worldwide from the company regardless of report criteria.
** The share of global projects from the company which match report criteria.
Source: fDi Intelligence from The Financial Times Ltd
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J-A Investment Historical Continuity
0
25,000
50,000
75,000
100,000
125,000
150,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
China Japan Netherlands Singapore UK USA
FDI Stock in Australia (A$ m)
Austrade’s Role in
Investment
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Austrade’s role and mission
What is Austrade?
• The Australian Trade Commission (Austrade) is the
Australian Government’s trade, investment and education
promotion agency
What is Austrade’s mission?
• To assist Australian companies to grow their international
business, attract productive foreign direct investment into
Australia and promote Australia's education sector
internationally
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The Australian Trade Commission, in cooperation with State and Territory governments, provides free and confidential assistance
1. Initial coordination of all investment enquiries and assistance
2. Information on the Australian business and regulatory environment
3. Market insights and investment opportunities. Create a strong business case for an investor to consider Australia, including specific state and territory business cases
4. Identification of suitable investment locations and partners in Australia
5. Advice on Australian government programs and approval processes - Ability to leverage the ‘badge of Government’ for the benefit of Australia
Assistance to Investors
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Key functions of Investment
Austrade undertakes five functions in its role as an Investment Promotion
Agency: Research & Strategy
Austrade-offshore/onshore
Department/States & Territory Governments-
onshore
Promotion
Austrade/Department/States & Territory Governments-
offshore
Department-onshore
Attraction
Austrade-offshore/onshore
Department/State & Territory Governments-
onshore
Facilitation
State & Territory Governments/Department-
onshore
Austrade-offshore/onshore
Aftercare
State & Territory Governments/Department-
onshore
Austrade- offshore/onshore
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Investment Priorities
Major
Infrastructure Clean Energy
Digital Economy
(including ICT)
Resources
Technology, Services
and Processing
Agricultural Science,
Food Technology &
Processing
Multi-State Priorities
Innovation Tourism
Infrastructure
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Japan – Investment Priority Market
Major
Infrastructure Clean Energy
Digital Economy
(including ICT)
Resources Tech,
Services and
Processing
Agricultural
Science, Food Tech
& Processing
Innovation
Life Sciences Advanced Manufacturing
(Material Sciences)
Unconventional Gas
Infra Finance
Construction
Tourism
Infrastructure
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Austrade’s Investment Network
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Business Examples
Eurus Energy Holdings Corporation
JV between Toyota Tsusho and TEPCO
Invested in the first wind farm Hallett 5 in SA
(May 2012). AGL intiially developed the wind
farm and continue to work closely with Eurus,
continuing to buy all of the electricity as well
as operate and maintain the facility under
long term arrangements.
Austrade has been supporting Eurus Energy
by providing information on Australian clean
energy industry capabilities and insights,
potential project opportunities and introduing
to stakeholders.
Source: http://eurus-energy.com/en/press/index.php?id=133
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Business Examples
Septem Soken Co., Ltd – SPTM R&D Australia
In 2011, SPTM R&D Australia was established within the Eskitis Institute for Cell and Molecular Therapies at Griffith University located in QLD to assess the efficacy of natural products and conduct collaborative research with the Institute.
SPTM R&D has full access to the Eskitis natural products library and screen them with the aim of discovering new active natural ingredients for new cosmetic/pharmaceutical products.
Austrade helped Septem overcome information asymmetries associated with the Australian market by removing language barriers, providing information on industry capabilities and regulatory information, refered to legal, tax professionals and TGA consultants.
Source: SPTM R&D,
Griffith University http://app.griffith.edu.au/news/2013/06/24/eskitis-leading-the-way-to-natural-beauty/
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Business Examples
• Rakuten LinkShare - Affiliate marketing network company, a subsidiary of Rakuten, has opened an office in Sydney as part of the company's international expansion plans. The company will work with local online retailers, as well as companies wishing to reach customers in Australia. (October 2012) Austrade New York and Tokyo assisted to develop the business case, supported LinkShare’s Australia site visits and introduced them to industry contacts and stakeholders.
• Sony Bank - Sony Bank, a wholly-owned subsidiary of Japan-based Sony, announced the opening of a representative office in Sydney. It will open the office with the purpose of researching the Australian financial market, given that its customers' demands for investment into this market are high. The comapny provides commercial banking services. (July 2011) Austrade assisted the company to introduce to APRA, industry contacts and stakeholders and provided information on the banking industry and regulatory requirements.
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Austrade Investment Website (www.austrade.gov.au/Invest)
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Why Australia - Benchmark Report
The Australia Benchmark
Report considers the key
investor Indicators of Growth,
Innovation, Talent, Location,
and Business and compares
Australia's position with other
countries.
http://www.austrade.gov.au/Invest/Rep
orts-Resources/Benchmark-Report
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Contact Austrade
• Call 13 28 78 and speak to one of our advisers
• Visit www.austrade.gov.au
• Email [email protected]