Japanese Investment in Australia Updated 28 September 2012
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
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
Stock of FDI in Australia by major markets Japan is Australia s third largest investors, stock increased 13.1% over 2011 to $61.2 billion 140,000 120,000 100,000 80,000 60,000 131,255 79,417 61,202 40,000 20,000 32,268 23,823 22,527 21,233 16,741 0 (A$ m) United States of America United Kingdom Japan Netherlands Singapore Switzerland Canada China 2009 2010 2011 2012 Source: Austrade Benchmark Report, ABS
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$1.2 billion Over the past five years, the fastest growing sources of foreign direct investment into Australia have been*: Luxembourg +25% Singapore +19% China +16% Japan +13% UK +13% * Compound annual growth rate since 2007 Source: Australian Bureau of Statistics, International Investment Position, 2012 (released 2 May 2013)
FDI into Australia by sector 2007-2011 - continues to grow across major sectors 180,000 +13.8% 160,000 140,000 120,000 100,000 +7.3% 80,000 60,000 40,000 20,000 0 (A$ m) +13.9% +16.1% 2007 2008* 2009 2010 2011 Source: ABS
Japan s Outward FDI (Level of Investment at End of Year) Japan s total outward FDI recorded over US$1,040 billion in 2012 (+8.6%). Australia 4 th preferred destination 300,000 $286,529 250,000 $237,800 200,000 150,000 100,000 50,000 0 (US$ m) $122,269 $94,444 $93,215 $61,344 $15,107 U.S.A. EU ASEAN China Australia India Netherlands 2007 2008 2009 2010 2011 2012 Source: JETRO Japan's Total Outward FDI by Country/Region (International Investment position)
Japan s FDI in Australia Australia s third largest investor with the total stock values of $61.2 billion in 2012 Approximately 11.1% of total FDI stock into Australia Japan s FDI stock in Australia recorded a CAGR of 14.5% between 2007 2012 Japan s outward FDI to Australia accounts for 4% of Australia s GDP fdi Markets Report (2003-13) top 5 Investment sectors: Sector No of projects Coal, Oil and Natural Gas 14 (11.7%) Industrial Machinery, Equipment & Tools 13 Business Machines & Equipment 12 Communications 11 Financial Services 11 Total 120
fdi Markets Report Japan s Investment in Australia: Key Trends (2003-2013) Company name No of projects Global projects* % of global projects** Toyota Motor 11 455 2.4 Fujitsu 6 107 5.6 Mitsubishi Corporation 5 315 1.5 Inpex 4 9 44.4 Sumitomo Group Yokogawa Electric 4 232 1.7 3 15 20 NEC 3 85 3.5 Marubeni 3 50 6 Sumitomo Mitsui Financial Group 3 40 7.5 Sekisui House 3 7 42.8 120 FDI projects The largest number of projects was announced in 2009, with 20 projects 67 Japanese companies invested in Australia, out of a total 43,099 companies investing in FDI globally Top 10 companies accounted for a combined total of 45 projects (37.5%) *Total number of projects worldwide from the company regardless of report criteria. ** The share of global projects from the company which match report criteria. Source: fdi Intelligence from The Financial Times Ltd
J-A Investment Historical Continuity FDI Stock in Australia (A$ m) 150,000 125,000 100,000 75,000 50,000 25,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 China Japan Netherlands Singapore UK USA
Austrade s Role in Investment
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
Assistance to Investors 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
Key functions of Investment Austrade undertakes five functions in its role as an Investment Promotion Agency: Aftercare State & Territory Governments/Departmentonshore Austradeoffshore/onshore Research & Strategy Austradeoffshore/onshore Department/States & Territory Governmentsonshore Facilitation State & Territory Governments/Departmentonshore Austrade-offshore/onshore Attraction Austradeoffshore/onshore Department/State & Territory Governmentsonshore Promotion Austrade/Department/States & Territory Governmentsoffshore Department-onshore
Investment Priorities Major Infrastructure Tourism Infrastructure Innovation Clean Energy Digital Economy (including ICT) Resources Technology, Services and Processing Agricultural Science, Food Technology & Processing Multi-State Priorities
Japan Investment Priority Market Major Infrastructure Tourism Infrastructure Innovation Clean Energy Infra Finance Construction Life Sciences Advanced Manufacturing (Material Sciences) Digital Economy (including ICT) Resources Tech, Services and Processing Unconventional Gas Agricultural Science, Food Tech & Processing
Austrade s Investment Network
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
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/
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.
Austrade Investment Website (www.austrade.gov.au/invest)
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
Contact Austrade Call 13 28 78 and speak to one of our advisers Visit www.austrade.gov.au Email info@austrade.gov.au