top reasons why brisbane is a global resource hub
TRANSCRIPT
55 TOP REASONS WHY BRISBANE IS A GLOBAL RESOURCE HUB
BRISBANEECONOMICSERIES OCTOBER 2013
investbrisbane.com.au
Brisbane gears up for G20Strong outlook for resourcesHotel market thriving
2 | WELCOME
Welcome to the revamped Brisbane Economic Series, Brisbane Marketing’s quarterly
publication bringing you all the latest investment news and analysis about our city’s economy.This edition explores the future of Queensland’s resources sector as it moves from the large capital-intensive construction phase into the production and export stage. Nowhere is this more prevalent than in the natural gas sector, which will start to export LNG to many parts of Asia over the coming two years.
It also takes a look at the investment market for Brisbane’s hotels, mining services and the research and innovation sector, as they propel Brisbane’s economy forward to its projected $217 billion a year by 2031.
There is also an update on the Digital Brisbane strategy, which aims to kick-start a business revolution to ensure the city capitalises on the rapidly growing digital economy.
Finally, we consider a truly once-in-a-generation opportunity for Brisbane: the G20 World Leaders Summit in November 2014.
As the G20 draws closer, Brisbane Marketing and the Brisbane City Council will be working overtime to leverage even more investment opportunities to ensure Brisbane becomes an economic powerhouse in the Asia Pacific.
If you are interested in connecting with Brisbane’s investment opportunities, please contact Brisbane Marketing’s Investment Attraction team at www.investbrisbane.com.au
Lord Mayor Graham Quirk
BRISBANEECONOMICSERIES OCTOBER 2013
WeBB
CONTENTSFeature: Queensland resources outlook 04
SilverNeedle targets Brisbane 06
Research centre 08
Brisbane goes digital 09
Brisbane gears up for G20 Leaders Summit in 2014 10
5 top reasons why Brisbane is a global resource hub 12
Brisbane a world leader in energy research 14
BOQ economic indicators 15
Breaking news 16
The Insider: 1 question, 4 experts 18
Investment Attraction column 19
Brisbane-Canada resources links still growing 21
CONTENTS | 3
UPCOMING EVENTS Page 22
With the global coal price under pressure, key industry figures interviewed by the Brisbane Economic Series believe Queensland’s increasingly broad commodities base could set the state’s energy and resources sector up for a new wave of expansion.
As chairman of BG Group in Australia, Catherine Tanna is developing a major long-term LNG project that’s helping transform Brisbane into a global resources and energy hub.
Ms Tanna and the team at QGC are delivering the Queensland Curtis LNG (QCLNG) project, representing $US20 billion worth of investment.
The project – which turns natural gas from coal seams into liquefied natural
gas (LNG) – has already created 1700 new jobs in Brisbane.
“When I came in 2009, we had about 200 people working here – today we have 1700 working in our offices in Brisbane alone,” Ms Tanna said.
“On the project build, we have about 12,000 people working in Queensland.
New world-class industry
“It’s the first time the LNG industry has operated on the Australian eastern seaboard and it’s a fantastic opportunity for Brisbane to become the centre of a whole new world-class industry.”
Ms Tanna said the project would deliver a long-term financial yield to both Queensland and Australia.
“When we are fully operational we will be contributing more than $1 billion a year in state and federal taxes in addition to the jobs and local economic contribution,” she said.
Queensland Resources Council chief executive Michael Roche remains bullish about the local resources sector.
Speaking at the Australian Steel Convention on the Gold Coast in September, Mr Roche said that despite the current tough trading environment, “irresistible forces” were driving the next investment phase.
“Those irresistible forces are also known as the billions of people in the developing world who aspire to the living standards that we take for granted,” Mr Roche said.
“The challenge now for us as a developed, resources-rich country is how to get the settings right at home to secure our fair share of that next wave of investment.”
Mr Roche noted some of the investment in the pipeline, including GVK’s Alpha Coal Project in the Galilee Basin and Adani Mining’s intent to bring its Galilee Basin Carmichael project to market.
“These Galilee Basin mine, rail and port projects could be the next big thing in Queensland after the completion of the three LNG projects in Gladstone,” Mr Roche said.
“And Arrow Energy is looking to present to its owners in 2014 the business case to move ahead with Queensland’s fourth coal-seam gas to LNG project in Gladstone.”
Mr Roche said the coal industry was responding to the difficult trading environment with a concerted program of cost reductions while, in an effort to spread high fixed costs over more tonnes, delivering higher production and exports.
“New production is also coming on line at Bowen Basin coking coal operations like Kestrel and the BMA Daunia
Mine and two new coking coal operations – BMA’s Caval Ridge and Anglo American’s Grosvenor Mine are being built as I speak,” he said.
“However, we will inevitably see more rounds of cost-cutting, evidenced most recently by the cold storing of the Collinsville mine.”
There is currently $151 billion in the resource project pipeline across Queensland. In addition to being a major coal and gas producer, Queensland ranks in the top five globally for production of silver, lead, zinc and bauxite.
It’s this diversified commodities base which is helping to fuel optimism in the future of the state’s energy and resources sector.
Bernie Hogan, regional manager of the Association of Mining and Exploration Companies (AMEC), said the mining investment and construction boom was now shifting into the production phase.
“It’s a bit overblown to say the mining boom’s dead,” Mr Hogan said. “It is a tough economic environment but good projects can still be supported – it’s just that capital that was around for speculation has disappeared.”
Queensland’s resources and energy sector
is changing, with a more diversifi ed resources sector and a renewed appetite for natural gas the keys to ongoing growth, writes Martin Philip.
4 | STRONG OUTLOOK FOR QUEENSLAND ENERGY AND RESOURCES
STRONG OUTLOOK FOR QUEENSLAND ENERGY AND RESOURCES
“ These Galilee Basin mine, rail and port projects could be the next big thing in Queensland after the completion of the three LNG projects in Gladstone,”
Michael Roche, Queensland Resources Council CEO
“ ...it’s a fantastic opportunity for Brisbane to become the centre of a whole new world-class industry.”
Catherine Tanna, BG Group Chairman
Catherine Tanna
To discuss investment opportunities
in Queensland’s resources sector, contact:
Corrie Germin
T: +61 7 3006 6239E: [email protected]
STRONG OUTLOOK FOR QUEENSLAND ENERGY AND RESOURCES | 5
Lower dollar lifts sector
Mr Hogan said while the falling Australian dollar was providing some relief to local miners and explorers, governments needed to do more to drive down costs on the resources sector.
“The Australian dollar coming off to around 90 cents has been a real boon for most of the sector,” he said.
“Without that, I think it would be a lot worse than we’re seeing it at the moment.
“The key to it all is reducing the cost of production for all businesses in Australia. That’s what’s going to help the mining industry. It’s going to help the explorers – and that just flows on to the economy.”
AMEC has welcomed the new Abbott Government’s pledge to introduce an exploration tax credit for investors.
In the lead-up to the September 7 poll, then-Shadow Resources Minister Ian MacFarlane promised an exploration development incentive (EDI) which would
allow investors to deduct the expense of exploration against their taxable income.
“Our scheme will target small exploration companies by limiting eligibility to companies with no taxable income and will be capped at $100 million over the forward estimates,” Mr MacFarlane said.
According to AMEC, the EDI is another way of incentivising investors to back exploration.
“Stimulating an exploration industry brings wages, services, procurement and all the taxes that come with that – meaning the government actually comes out on top,” Mr Hogan said.
“It stimulates the economy, particularly in a lot of regional areas, and it will also help places like Brisbane and the thousands of people who depend on the mining industry there.”
An AMEC-commissioned report prepared by KPMG found the current tax arrangements did not encourage investment in Australian greenfields mineral exploration projects.
“The introduction of a Mining Exploration Tax Credit in Australia ... is a tax reform policy that could help reinvigorate investment in exploration activities in Australia,” the report said.
The QRC has also welcomed the proposed EDI.
“Providing investors with a modest tax incentive to support explorers is a sound investment in the future and something the QRC has been pressing successive federal governments to adopt,” Mr Roche said.
Mr Hogan believes that despite the pressure on the global price of coal, there is a group of emerging coal players in Queensland that will soon be reaping the benefits of their investment.
“They’re the ones who are within 12 months to two years of being at production stage … those entrepreneurial companies who have taken a punt, and it’s starting to take off,” he said.
Mr Roche also believes the window of opportunity to build a new coal mine in Queensland remains open.
“There has never been a better time this century in terms of being able to contain costs for a greenfield project,” he said.
“This is the time for a smart mid-tier coal company to win over the financiers and make their mark in Queensland.”
CSG market yet to peakSandeep Dalvi, manager - Oil & Gas Australasia for engineering, project and construction management group HATCH, argues that Queensland’s long-term CSG-to-LNG projects will continue to drive investment in the local resources sector.
“These plants are mainline investments, they’re not something that will go away in five years or 10 years,” he said.
“They’re 25-year-long projects, and they will provide sustained employment to that region.
“We haven’t seen the peak of the CSG market. There will be more and more investment required just to make sure that the current LNG plants, and possibly some future expansions, are supplied with sufficient gas.”
Mr Dalvi said HATCH was eyeing expansion opportunities in Gladstone to service the LNG export market, along with other clients.
“Gladstone is very important for us, not just because of CSG products, but because of the existing industries we support there, including clients in the mining and power sectors,” he said.
“We believe that Gladstone will always thrive because in addition to its existing industries, it’s now developing a major oil and gas industry.”
According to Mr Hogan, the real challenge for governments is to recognise that the local resources and energy sector isn’t unique – and that investors can vote with their feet.
“We don’t have a monopoly on resources – there’s coal, iron ore, gold and diamonds all over the world,” he said.
“There’s no loyalty to capital – people will spend wherever they can to get the best return – and we don’t have a monopoly on the expertise. The mining industry travels, it goes anywhere, so we have to make sure it’s most attractive for them to invest here.”
“ They’re 25-year- long projects, and they will provide sustained employment to that region.”
Sandeep Dalvi, HATCH Manager – Oil & Gas AustraliasiaAustralasia
“ ...good projects can still be supported - it’s just that capital that was around for speculation has disappeared.”
Bernie Hogan, Association of Mining and Exploration Companies,Regional Manager
Michael Roche
Case Study
SilverNeedle Hospitality Group International has delivered a $100 million vote of confidence in the Brisbane hotel market.
The Singapore-based company is spending $50 million refurbishing the landmark Chifley At Lennons hotel after acquiring the Queen Street Mall site for $57 million last year.
SilverNeedle chief executive officer Iqbal Jumabhoy said the Brisbane hotel market had strong fundamentals.
“There is a pent-up demand for business rooms in Brisbane and we believe that will continue,” Mr Jumabhoy said.
“We’re very comfortable with the dynamics of the Brisbane market, and my own view is that the master plan that’s been put in place, and the plan for Brisbane going forward, is extremely attractive for business.”
The SilverNeedle development will deliver more than 150 extra hotel rooms in Brisbane ahead of the G20 World Leaders Summit in November 2014.
The refurbishment will nearly double the hotel’s number of rooms to 300, while delivering new bars and restaurants, a new foyer and rooftop pool and 2000sqm of retail space.
Lord Mayor Graham Quirk said SilverNeedle’s
investment was a vote of confidence in Brisbane’s thriving hotel market.
“The recent acquisitions and planned refurbishments and expansions of existing hotels shows there is great interest in Brisbane’s hotel market,” Cr Quirk said.
“This is confirmed by Brisbane Marketing research released in March showing that Brisbane’s hotel market has the capacity to grow by
up to 450 rooms a year for 10 years.
“According to our research, Brisbane’s domestic and international business and leisure visitors are forecast to grow, creating strong demand for more world-class hotels.
“Brisbane is continuing to grow into a destination of choice for international visitors and events, including the upcoming G20 Leaders Summit 2014, and I want to ensure we can continue to accommodate these events.”
Other recent acquisitions of existing hotels and new hotel plans in Brisbane include:
• The Brisbane Marriott was purchased by the Malaysia-listed Starhill Real Estate Investment Trust (as part of a portfolio for a total of $415 million).
• Shangri La Hotels and Resorts group purchased the Holiday Inn for $48 million and is operating it as Traders Hotel.
• Starwood Hotels & Resorts Worldwide and Felicity Hotel will open a Four Points by Sheraton hotel in the Brisbane CBD by mid-2014.
6 | CASE STUDY
“ We’re very comfortable with the dynamics of the Brisbane market, and my own view is that the master plan that’s been put in place, and the plan for Brisbane going forward, is extremely attractive for business.”
Iqbal Jumabhoy, SilverNeedle Group CEO
BRISBANE HOTEL MARKET BOOMING AS SINGAPORE INVESTORS MOVE IN
| 7
RESEARCH CENTRE Demographics – The Rise of Australia’s New World City
Tourism
78.8%(Source: STR Global, YTD Aug 2013)
HOTEL OCCUPANCY RATE
TOP 5 INTERNATIONAL ARRIVALS INTO BRISBANE IN THE 2012 CALENDAR YEAR
1. New Zealand – 449,300, on par with 2011
2. United Kingdom – 131,700, up 2.3% from 2011
3. China – 98,100, up 20.9% from 2011
4. USA – 79,000, up 15.3% from 2011
5. India – 38,800, up 10.6% from 2011 (Brisbane Airport Corporation)
(Source: Brisbane Airport Corporation)
NUMBER OF EMPLOYED
July 2003
846,500 EMPLOYED
July 2013
1,074,800EMPLOYED
Forecast employment in 2031
1,532,200
An additional 228,300 jobs in Brisbane between July 2003 and July 2013.
ECONOMIC GROWTH: 2001-2011
Brisbane
4.7%Queensland
4.1%Rest of
Australia
2.9%
Population
2,126,986(Greater Brisbane, June 2012)
CURRENT POPULATION
POPULATION GROWTH RATE
2.3% BRISBANE
2.0% MELBOURNE
1.6% SYDNEY
3,042,276 (Source: OESR, Population Projections 2011)
FORECAST POPULATION IN 2031
Economy & Employment
$135 BILLION(Source: Qld Treasury and Trade)
BRISBANE GROSS REGIONAL PRODUCT (GRP)
NUMBER OF BUSINESSES IN BRISBANE
June 2009
181,419June 2012
189,244
2.4% BRISBANE
2.3% MELBOURNE
1.4% SYDNEY
ANNUAL EMPLOYMENT GROWTH 2003-2013
8 | RESEARCH CENTRE
BRISBANE POWERS AHEAD WITH NEW DIGITAL BRISBANE WEBSITE
A website providing Brisbane’s small and medium businesses with all the information they need to lift their digital capabilities has been launched as part of the Digital Brisbane strategy.
The new-look digitalbrisbane.com.au is a resource portal for small businesses and includes the latest digital news, information on digital events and digital support from experts through video content and blogs.
With its strong export focus, Digital Brisbane provides local businesses with
a blueprint to increase their global reach in an era in which the digital economy is estimated to be worth $US20 trillion. The strategy is the culmination of extensive consultation with Brisbane businesses and industry, led by Brisbane’s chief digital officer Kieran O’Hea.
Digital Brisbane has a five-year agenda to speed up the pace of change and kick-start a business revolution in the city.
The targets of the Digital Brisbane strategy are:
• Doubling the number of Brisbane fi rms selling products and services online within fi ve years.
• A 35 per cent improvement in productivity growth through digital technology within fi ve years.
• Providing support for 250 promising local digital start-up companies.
Specific initiatives of the strategy are:
• A Digital Business Power-up program to help thousands of businesses with face-to-face digital training and information forums
• Digitalbrisbane.com.au – a web-based support tool which includes expert articles, blog posts and videos to help small and medium businesses adopt digital into their day-to-day practice
• A “match-making” tool putting small and medium businesses
in touch with digital service providers
• Make digital self-assessment tools widely available so that small and medium businesses can measure their own digital capability
• Grants for entrepreneurs with promising digital start-up ideas
• Programs to link dozens of digital business “start-up” operators with potential mentors and investors
• The Coderdojo program which is helping hundreds of young people to learn how to code and develop apps and websites
• A Digital Cyber-City program to ensure continued improvements to connectivity, digital services and data access across the city
• Ready access to wi-fi services across the city and cutting edge online and mobile applications for visitors
To find out more about the Digital Brisbane strategy and how it can help you and your business, visit digitalbrisbane.com.au
BRISBANE’S DIGITALLY DRIVEN ECONOMY | 9
Aims of the
strategy
The Digital Brisbane strategy goals are:
PRIORITY Ensure the digital economy is a high priority for Brisbane businesses
TARGETED INVESTMENT Initiate high-value digital support activities through a targeted investment by the City
POSITIONINGPosition Brisbane as a significant digital city
Specific five-year target outcomes
TRAINING Support, promote or initiate digital training, information sessions and conferences that provide face-to-face support for thousands of businesses a year and online support for a further 30,000 users per year
BUSINESS ONLINE Double the number of Brisbane companies conducting business online
SUPPORT Support 250 Brisbane digital start-ups, some with global potential through events, referrals to incubators, mentors and commercial advice
LEARNING Create at least one chair, course or program in Digital Economics or Digital entrepreneurialism
DIGITAL READINESS SCORE Lift Brisbane’s digital readiness score (as measured by The Economist’s Economic Intelligence Unit methodology) by 1%. This would translate to a 35% improvement in annual productivity growth and a $560 million lift in Gross Regional Product (a measure of the size of a metropolitan area’s economy)
BRISBANE GEARS UP FOR G20 LEADERS SUMMIT IN 2014
With a diversifi ed economy that
embraces, rather than depends on, the mining industry, Brisbane is well placed to build on its other strengths in education, tourism, retail, professional services, construction and IT.
The world is starting to sit up and pay attention, with the decision to award Brisbane the right to host the world’s most important leaders via the coveted G20 Summit the ultimate vindication.
This is an important development in Brisbane’s history, and the November 2014 summit will have a long-lasting legacy as important as other game-changing events for the city such as the Commonwealth Games and Expo 88.
Brisbane is already well advanced in leveraging the G20 Summit to help position the city as a strong investment, conventions and study destination.
Brisbane Marketing’s Choose Brisbane campaign, launched in March by Lord Mayor Graham Quirk, uses G20 images and messages to remind business decision-makers in Asia and Europe that Brisbane is a city significant enough to host the world’s leaders. The next phase of the campaign, already seen by two million people in Asia, was launched in Hong Kong in September.
Research conducted by the Colmar Brunton Group shows the campaign has been highly successful in generating positive perceptions of Brisbane in Asia. The campaign was seen
by nearly half of all business decision-makers surveyed in Hong Kong. For those who saw the campaign, their likelihood to consider Brisbane as an investment opportunity doubled from 24 per cent to 47 per cent.
As the G20 summit draws closer, Brisbane Marketing will continue campaigns and messaging to evolve Brisbane’s positioning as a serious player in the Asia Pacific.
This is Brisbane’s chance to showcase itself as the closest Australian capital city on the eastern seaboard to Asia, ideally placed to become an economic powerhouse in the region.
The economic benefits to the city are expected to run into the hundreds of millions, with an upsurge in trade for local shops, hotels and restaurants, along with increased international media coverage for Brisbane.
International experience from previous summits suggests Brisbane can expect an upsurge in interest as an international business and meetings destination as a result of the G20.
Other benefits arising from the city’s improved international image are expected to include more foreign investment and increased tourism as a result of hosting the summit.
10 | BRISBANE GEARS UP FOR G20 SUMMIT IN 2014
Strategic legal advisor to businesses throughout
Australia and China
BRISBANE PERTH SHANGHAI+61 7 3024 0000 +61 8 9211 8111 +86 1381 680 4743
www.hopgoodganim.com.au
| 11
TOP REASONS WHY BRISBANE IS A GLOBAL RESOURCE HUB
12 | TOP 5 REASONS WHY BRISBANE IS A GLOBAL RESOURCE HUB
DID YOU KNOW?
Given current and future projects in the pipeline, Australia could overtake Qatar as the world’s largest producer of LNG as early as 2017.
55
TOP REASONS WHY BRISBANE IS A GLOBAL RESOURCE HUB
12 | TOP 5 REASONS WHY BRISBANE IS A GLOBAL RESOURCE HUB
TRANSPORTWorld-class transport and logistics
CAPITALMore than $150 billion worth of capital investment in projects throughout Queensland
SUPPLY CHAINIntegrated supply chain from extraction through to transportation, refinement and export
SKILLSAccess to a highly educated and skilled workforce, guaranteeing expertise at all stages of the production process
INNOVATION Industry development with a strong focus on innovative technologies
01
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$150 billion worth of projects
92%of Australia’s
CSG resources
Home to
2000kmof gas transmission
pipeline under development
01
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FAST FACTS on Queensland’s CSG industry
BRISBANE A WORLD LEADER IN ENERGY RESEARCH
New York-born Mike McWilliams has helped Australia’s new world city Brisbane earn its reputation as a world leader in
minerals and energy innovation.
Dr McWilliams heads up a team of more than 360 researchers as executive manager of the Queensland Centre for Advanced Technologies (QCAT), in Brisbane’s west.
“The Queensland Centre for Advanced Technology is Australia’s largest minerals and energy innovation precinct,” Dr McWilliams said.
“We work closely with governments, universities and industry to develop the technologies and innovations that are required for Australia’s future.
“Our main focus is on mining-related technologies but we also do research in construction, agriculture, ICT and robotics.
“One of our most important jobs is to find solutions for the environmental problems associated with resources production.”
QCAT is a collaboration between the Commonwealth Scientific and Industrial Research Organisation (CSIRO), the Queensland Government and industry partners including BHP Billiton and Rio Tinto.
Dr McWilliams said QCAT was helping to secure Brisbane’s status as a leading resources and energy hub.
“Brisbane is an internationally-recognised centre for energy and minerals research,” he said.
“It’s also a growing resources centre that’s now home to more than 170 of the world’s leading mining and energy companies.
“At CSIRO we’re developing new technologies with industry and Brisbane’s three world-class universities that create environmentally responsible ways of producing energy and resources.
“The mining and energy technology services that we build and the innovations that we make have great export potential and in the future they have even greater value.”
Dr McWilliams said Brisbane’s cosmopolitan culture, subtropical climate and natural attractions made it one of the world’s most livable cities.
“Brisbane is a vibrant, diverse city with amazing culture, a wonderful arts scene and great transport connections to the rest of the world,” he said.
14 | BRISBANE A WORLD LEADER IN ENERGY RESEARCH
SNAPSHOT OF KEY ECONOMIC INDICATORS
This article may contain opinions as well as factual information. You should not rely solely on the information and opinions contained in this article, and instead conduct your own independent research into those matters. In addition, any advice contained in this article has been prepared without taking account of your particular circumstances, fi nancial situation and/or needs. You should consider the appropriateness of any advice for you and seek independent fi nancial advice before acting on the advice. Furthermore, you should obtain and consider the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) before making any decision to acquire and/or hold the relevant facility/product. PDSs and FSGs can be obtained from your BOQ Branch. Bank of Queensland Limited ABN 32 009 656 740.
Equity marketsEquity markets both offshore and locally continue to build on gains made from the second half of 2012. The ASX200 benchmark broke through a major level of 5000 at the start of this year and since that point it has seldom been below it. The Dow Jones Index (Q.DJI) is usually the benchmark for correlation for the ASX200 (Q.AXJO) and this continues to be the case going forward. The DJI reached its highest point in 20 years (including pre-GFC) in August 2013 of 15568.36, and with the QE3 tapering not taking effect in September this year as markets were expecting, there is now a perception that this will continue to climb. Locally, the perceived end of the mining boom continues to weigh on resource equities.
Daily Q.DJI, Q.AXJO 22/09/2008 - 24/12/2013 (SYD)
Line, Q.DJI, 19/09/2013, 15,636.55, -40.39, (-0.26%), Line, Q.AXJO, 20/09/2013, 5,272.500,
PriceUSD
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15,636.55PriceAUD
3,200
3,400
3,600
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Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42009 2010 2011 2012 2013
RBA moves to neutral outlookThe minutes from the Reserve Bank of Australia (RBA) board meeting in September provided
little clarity in terms of forward guidance. The RBA cut 25 basis points from the cash rate in August to a record low of 2.50 per cent, citing subpar economic growth and restrained inflation. By not signalling any immediate intention to continue to cut rates in the foreseeable future, some analysts believe the RBA has moved to a neutral policy, rather than an easing bias which has been adopted in the past.
Federal Reserve continues stimulusSince the statement, the Federal Reserve has stated that it will not undertake any tapering of its bond purchasing program. This was widely unexpected for the financial markets. The Fed stated a preference to wait for further confirmation of improvement in the outlook.
Daily QAU3MBA=, QAUDQM3AB3Y=, QAUDQM3AB5Y= 23/08/2003 - 28/02/2014 (SYD)
Line, QAU3MBA=, Last Quote(Last)20/08/2013, 2.5800Line, QAUDQM3AB3Y=, Bid(Last)22/08/2013, 3.1275Line, QAUDQM3AB5Y=, Bid(Last)22/08/2013, 3.6800
PriceAUD
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20142000 2010
Resources outlookThe resource sector is expected to remain strong in the coming quarters. This graphic shows the three-year (orange), five-year (white) and 3m Bank Bill Swap Rates (BBSW) over the past 10 years. The 3m BBSW rate is said to be closely correlated to future cash rate movements, so while the line is still trending downwards, the market still feels that the economy in the long term (three to five years) will improve.
Bank of Queensland Treasury takes a look at the latest economic indicators.
For more information:
Liam Jeffrey
Bank Of QueenslandT: 07 3212 3865E: [email protected]
Australian dollarThe Australian dollar has had its fair share of volatility in the past six months. It is hard to believe that in mid-April this year it was trading at above $1.0600 but now finds ground at the mid-90 cent mark. With two cuts made this year in May and August, this was seen as one of the major reasons for the currency depreciation. Following the Federal Reserve’s September meeting, the AUD has risen to a multi-month high of 0.9350 (at time of publication). Many analysts have downgraded their forecast levels, with the AUD consolidating the 13 per cent fall since mid-April. Markets are expecting the terms of trade to decline further, with softer iron ore (among other commodities) prices along with a slowdown in China – Australia’s biggest export partner. With the dollar at this stage remaining attractive to tourists, spending in hotels, cafes and restaurants may rise if tourism does lift.
PriceUSD
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21 25 27 30 03 05 09 11 14 17 19 23 25 28 31 02 06 08 11 14 16 20 22 25 28 30 03 05 08 11 13 17 19 22 25June 2013 July 2013 August 2013 September 2013
SNAPSHOT OF KEY ECONOMIC INDICATORS | 15
Howard Smith Wharves – a new inner-city hotel investment opportunity
Metso moves to Brisbane
Global technology supplier Metso Process Technology and Innovation has announced the relocation of its global headquarters to Brisbane.
Metso will relocate to the Queensland Centre for Advanced Technologies (QCAT) in the city’s west.
QCAT is a collaborative research precinct linking CSIRO, the Queensland State Government, Cooperative Research Centres and other R & D organisations.
It is one of the largest integrated research and development centres for the resources and associated advanced technology industries.
Spokesman Joao Ney Colagrossi said Metso planned to further develop and provide advanced technological services and solutions to the local resources industry.
Mr Colagrossi said Metso was involved in advanced consulting services, customer-driven product innovation (advanced instruments, software and hardware) and R & D.
Over the past 10 years, Metso has undertaken almost 400 projects globally – implementing methodologies which include throughput forecasting, geometallurgical modelling and co-effi cient mining and processing.
For media contact: Martin Philip [email protected] or +61 7 3006 6286
16 | BREAKING NEWS
BREAKING NEWS
Hotel investors can still take advantage of a new investment opportunity in one of Brisbane’s most historic precincts.
Lord Mayor Graham Quirk’s formal call for proposals to develop the Howard Smith Wharves site, located between Brisbane’s CBD and the prestigious New Farm peninsula, remains open until October 16.
The site occupies an exceptional location, with 500m of direct frontage to the Brisbane River and the iconic Story Bridge.
With its proximity to the CBD and easy access to the leisure and cultural precinct at South Bank, the site ticks many boxes for hotel investors and operators.
In addition to a new hotel, plans for the site – which is being offered to investors on a 99-year lease basis – could also include restaurants, retail, offi ce and community facilities.
The 3.43ha Howard Smith Wharves site offers hotel investors a unique prospect unmatched in any other Australian city.
Work to restore the site’s 170m timber wharf was completed in March.
BREAKING NEWS | 17
Choose Brisbane campaign enters new phase
Hong Kong and Chinese arts identities feature in the latest phase of the Choose Brisbane campaign.
Esteemed Hong Kong fi lm producer Nansun Shi and leading Chinese-born contemporary artist Cai Guo-Qiang are among the faces of the campaign to promote Brisbane as Australia’s new world city.
The Choose Brisbane campaign invites Hong Kong and Chinese decision-makers to consider Brisbane for business and investment, study and conventions when looking to do business in Australia.
Choose Brisbane has been enormously successful since its launch in March.
The campaign has so far reached 2.1 million people across Asia through digital advertising, while the website has so far attracted more than 45,000 visitors.
It reinforces Brisbane’s already strong business and trade ties with Hong Kong and China as well as Brisbane’s growing reputation as a trailblazer in the Asia Pacifi c and its expertise in areas such as research, resources, innovation and education.
Choose Brisbane will be extended into the UK, US, Japan and Europe in the next 12 months.
For more information on the campaign, visit
choosebrisbane.com
C H OO S E B R I S B A N E .C OM
B E C H T E L - A N DY G R E I G
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B G G R O U P - C AT H E R I N E TA N N A
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N A N S U N S H I – A S I A PAC I F I C S C R E E N AWA R D S
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F R U I T N I N J A – P H I L L A R S E N
2 million population
Brisbane’s population has grown to more than 2 million people and is projected to reach 2.9 million by 2031
$135 billion economy
Brisbane’s economy is predicted to grow to more than $A217 billion GRP by 2031
25%
48%Brisbane’s share of Queensland’s economy
of Brisbane’s GRP generated by resource sector
1 localgovernment
Brisbane City Council is the second-largest council in the Southern Hemisphere with a total
operating budget for 2012-13 of $A3.11 billion
What action should Brisbane take to seize the opportunities and meet the challenges arising from the Asian Century?
THE INSIDER
Brisbane must leverage its natural advantage as a lifestyle city with diverse economic grounding and minimum time difference in a developed western economy. Companies here must look at their organisational advantage and determining gaps they can fill, and actively involve Asian business and clients in their value chains and distribution channels.
Dennis Lin, China Advisory Services Lead Partner, BDO
Brisbane’s future as the key Australian trade gateway to Asia will be determined by our ability to deliver efficient connectivity for goods through Queensland’s largest port – the Port of Brisbane. Sustainable planning of multi-modal freight infrastructure will unlock the potential of South East Queensland’s exporters and boost the productive capacity of Queensland’s economy.
Russell Smith, Chief Executive Officer, Port of Brisbane
Foreign investment is a key driver of Brisbane’s building sector, funding new office tower and hotel projects at a time when domestic capital and confidence are scarce and patchy. Our proximity to Asia is no longer a disadvantage – we are in the right place at the right time to strengthen ties and maximise economic opportunities in the region.
Martin Monro, Chief Executive Officer, Watpac
Australia needs to be a level playing field, welcoming investment and helping foreign investors understand the process with a transparent and well-explained approval process. We need to be innovative, with an Asia-literate workforce, investing in key political and industry partnerships to drive change and grow opportunities.
Steve Abbott, President of Australia China Business Council Queensland Branch and partner of KPMG
18 | THE INSIDER
If you would like to discuss
investment opportunities in
Brisbane, contact:
Steven Silvester
Brisbane Marketing
Director, Investment Attraction
T: +61 7 3006 6239
F: +61 7 3221 6252
M: +61 434 567 172
www.brisbanemarketing.com.au
Global Trends in FDIAs we enter the second quarter of the 2013/14 financial year, Brisbane has good reason to be optimistic about the future. Foreign Direct Investment (FDI) flows into Australia continue to grow, albeit modestly, amid
a downward trend for many other nations. The fDi Intelligence Global Greenfield Investment Trends report for 2013 showed that of the leading top five destinations in Asia-Pacific, Australia was the only country to achieve growth in project numbers, with FDI rising by 4.24%.
This growth is likely a flow on from the resources and energy sectors investing heavily in new construction projects in 2012, however there may be further trends at play. IBM Global Business Services Group produces a Global Location Trends Annual Report each year and the 2012 annual report IBM highlighted that in a more complex and more uncertain world, companies are taking a more strategic approach to optimising their international operations.
At Brisbane Marketing we have seen this trend for some time. As companies have experienced difficult trading conditions in their home markets, countries such as Australia have provided a stable and constant opportunity for pursuing further growth. Corporations both large and small continue to look for opportunities for growth, talent access and cost efficiencies and those regions and cities that do not offer these opportunities are finding it increasingly difficult to compete for FDI.
Brisbane offers investors an opportunity to balance their value considerations of cost versus the opportunities for accessing a talented workforce, expanding transport infrastructure, the infrastructure for human capital and the stability of regulation to compete.
Update on the Brisbane Marketing Investment Attraction teamBrisbane Marketing’s Investment Attraction division boasts a combined 83 years business experience in both the private and public sectors. It has significant international experience in markets including Asia, South America, Western Europe, UK, USA and Canada.
The team’s industry-specific knowledge includes engineering, software development, industrial property & construction, mining, unconventional gas, food & beverage, finance, and human resources. This is bolstered with extensive inward investment and economic development agency tenures.
The team examines growth opportunities and works with investors to determine how Brisbane can best fit with their business strategy. Our services include business case development, critical introductions, talent and labour analysis, property solutions and advice regarding grants and incentives. We connect investors with our extensive political, business and media networks to maximise their market entry strategy and opportunities for growth. The team continues to provide guidance during transition and implementation through to aftercare and reinvestment.
Since July 2012, Brisbane Marketing’s Investment Attraction team has been working to deliver a range of new initiatives focused on attracting foreign investment into Brisbane. These projects include:
• The Global Resources Hub, which focuses on attracting investment into Brisbane’s resources R&D sector, attracting investment into the resources supply chain and attracting direct capital into Brisbane’s exploration sector.
• Our Brisbane Hotel Investment Strategy, which is targeting institutional property investors and owner operators in the global hotel industry and connecting them to developable opportunities in Brisbane. The strategy was developed in response to research commissioned jointly by Brisbane Marketing and the Queensland
Government. The research found that the city was forgoing approximately 87,000 visitors each year due to room supply shortages. Within 12 months the strategy has yielded three new hotels under construction with another in final design stages.
• Choose Brisbane - is a three-year campaign to position Brisbane globally as a destination of choice for business investment. It articulates a clear definition of Brisbane as Australia’s new world city, strengthening its identity as an emerging global city supportive of investment from key industry sectors. Launched in Hong Kong in March 2013, Colmar Brunton research showed that the campaign moved perceptions for those considering investment in Brisbane from 27 percent to 4 percent. Lord Mayor Graham Quirk announced an extension of the campaign in September.
Steven Silvester, Brisbane Marketing
Director, Investment Attraction
INVEST BRISBANE
INVEST UPDATE | 19
Tickets are on sale now!
To purchase your tickets and to
view this year’s fi nalists, visit
lmba.com.aulm
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Come celebrate Brisbane’s
night of nightsThe Lord Mayor’s Business Awards
Gala Dinner is an occasion not to be
missed with unlimited opportunities
for networking with key stakeholders
and clients.
The awards night is a lavish affair
including a sumptuous three-course
dinner, premium beverages and
entertainment by Brisbane’s
freshest talent.
Hosts for the evening will be Bill
McDonald from Seven News and
Sofi e Formica from The Great South
East. Tickets are only $175 each or
$1,700 per table of 10 (plus GST).
This year’s awards will be presented at
a corporate black tie gala ceremony,
returning to the refurbished, majestic
City Hall.
Date: Friday 11 October 2013
Time: 7pm for 7.30pm
start – 11.30pm
Venue: City Hall Auditorium
Dress: Black Tie
Invite your clients, colleagues,
stakeholders and join Lord Mayor
Graham Quirk to celebrate this
year’s awards!
LORD MAYOR ’S
BUSINESSAWARDS
BRISBANE-CANADA RESOURCES LINKS STILL GROWING | 21
The energy and resources sectors of Brisbane and Canada are forging ever closer ties as new players such as Boréalis enter the local market.The Canadian mining services company is using its growing Brisbane base to pursue new partnerships with the major players in the Asia Pacific resources sector.
Boréalis now services the three companies developing Queensland’s three major CSG projects – Santos, QGC and Origin.
Company president and CEO Jules Paquette said it was now looking for further opportunities in the local resources sector.
“If you look at economic forecasts, one of the regions that will be growing the most in the next 20 years is definitely Asia Pacific,” he said.
“For us, it’s absolutely essential to have a presence and capacity in Brisbane so we can cater for all the projects that we’re going to get in this part of the world.
“The volume that comes with CSG makes Brisbane a major player. Working in surrounding countries like PNG, Indonesia and the Philippines, the proximity to the Asia Pacific is great.”
The strength of the growing Brisbane-Canada ties were on display in August when Brisbane hosted a delegation comprising 21 companies from Canada, USA, China and the Czech Republic which attended BDO’s offices for a mining industry briefing.
The industry briefing session, which was coordinated by Brisbane Marketing and BDO, included six key industry speakers from Austrade, Association of Mining and Exploration Companies (AMEC), Geological Survey Queensland and HopgoodGanim.
Brisbane Marketing’s Investment Attraction team also supported eight Canada-based companies from Ontario in organising a lunch technology showcase session with 25 local mining industry representatives.
As part of the delegation’s visit, Brisbane Marketing – in partnership with the Canadian Government and Fragomen – hosted a networking reception for almost 100 prominent mining industry leaders.
The reception coincided with the Canadian Government’s announcement of the official opening of its Brisbane-based office and newly appointed Trade Commissioner for Queensland John Williams.
Brisbane Marketing director of investment attraction Steven Silvester welcomed the decision
to open a Brisbane office with a permanent trade commissioner.
Mr Silvester said Brisbane Marketing had successfully targeted a number of Canadian companies for investment in the local market.
“Brisbane Marketing has facilitated investment in Brisbane from a number of Canadian companies including Enersight Petroleum Planning, Equinox Engineering, MineSense Technologies, Talisman Energy, Trican and Boréalis,” he said.
“Other notable Canadian companies located in Brisbane include Hatch, SNC Lavalin, and Bombardier.
“This presence underlines the importance of Brisbane and Canada continuing to share expertise and explore further trade and investment opportunities.”
If you would like to explore investment opportunities in Queensland’s energy and resources sector, contact Corrie Germin, senior manager, investment attraction (commercial) at [email protected]
BRISBANE-CANADA RESOURCES LINKS STILL GROWING
UPCOMING EVENTSLord Mayor’s
Business Awards
The Lord Mayor’s Business Awards Gala Dinner is a marvellous opportunity to celebrate the best of Brisbane’s business community while networking with key stakeholders and clients.
WHERE: City Hall Auditorium, King George Square, Brisbane
DATE: Friday 11 October 2013
TIME: 7pm for a 7.30pm; start to 11.30pm
DRESS: Black tie
Energy & Resources Industry
Innovation Breakfast
Join Brisbane Marketing and Austmine for an Energy & Resources Industry Innovation Breakfast to discuss the critical needs and opportunities for innovative solutions in the energy and resources industry.
DATE: Wednesday 16 October 2013
TIME: 7.15am for 7.30am; event concludes at 9.00pm
VENUE: Ithaca Auditorium, Level 2, Brisbane City Hall, King George Square, Brisbane
22 | DIARY
Brisbane was recently named one of the Top 10 Asian Cities of the Future by fDi Magazine - and the city is regularly singled out as a city to watch due to its optimal location, growing depth of talent, innovation and diverse economic growth potential.
TEMPERATURE
BRISBANE 29 26 22 26
MELBOURNE 26 20 16 22
SYDNEY 26 23 18 23
PERTH 32 27 19 24
ADELAIDE 29 22 17 23
SUMMER AUTUMN WINTER SPRING
AUSTRALIAN DESTINATIONS FROM BRISBANE
GOLD COAST1 HOUR BY TRAIN OR CAR
SUNSHINE COAST1 HOUR BY CAR
SYDNEY1 HOUR BY PLANE
MELBOURNE2 HOURS BY PLANE
GREAT BARRIER REEF2 HOURS BY PLANE
DID YOU KNOW
Brisbane independent game developer Half Brick Studios leapt to prominence in 2011 with its instant international hit Fruit Ninja.
More than 500 million downloads later, Fruit Ninja has gone on to become the second most successful mobile app in history.
Half Brick has also gone from strength to strength and is now something of a poster child for Brisbane’s burgeoning creative industries.
The award-winning game developer is still blazing a trail that continues to inspire other local developers, according to its Chief Marketing Offi cer Phil Larsen.
“Fruit Ninja helped to build more awareness of the app economy not only in Australia, but also in Brisbane,” he says.
“People say, ‘Wow, we can actually do this in Brisbane’.
“There’s now a lot more attention being paid to high-tech and knowledge industries in Brisbane, by governments and universities.”
FRUIT NINJA PUTS BRISBANE MOBILE APPS ON THE MAP
BRISBANEECONOMIC
SERIESNEXT ISSUEDECEMBER
CONTACT
www.investbrisbane.com.au
Level 8, Roy Harvey House, 157 Ann Street, Brisbane, Queensland, Australia, 4000
PO Box 12260, George Street, Brisbane, Queensland, Australia, 4003
Phone: +61 7 3006 6200 Fax: + 61 7 3006 6250 Email: [email protected]
As a wholly owned subsidiary of Brisbane City Council and the city’s economic development agency, Brisbane Marketing plays a key role in the ongoing evolution and success of our city. We drive economic and social benefits to residents and business by profiling Brisbane globally as Australia’s new world city and as a destination for business investment, export, international students, conventions, tourism, major events, and CBD retail.
PUBLISHED BY
www.investbrisbane.com.au
Disclaimer: Brisbane Marketing believes that the information contained in this document is accurate at the time of publication. Neither Brisbane Marketing nor any member, employee or other representative thereof undertakes responsibility in any way whatsoever to any person or body (whether a purchaser or reader of this document or not) for any errors or omissions in this document however they may have been caused. Statistic sources can be provided on request. Photo Credits: p.22. Tony Phillips (Goodwill Bridge from South Bank).