Riordan Grains finds growth in North Asia

December 2017

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Like a seed in a field of crops, Riordan Grains Services has grown to become a competitive player in the global market thanks to Australia’s free trade agreements with North Asia.

Riordan Grains Services is a family-owned business in Victoria, specialising in grain marketing, transport, storage and container packing. The company exports wheat, barley and other grains to several Asian countries, including South Korea and China.

What started as a small company with only one tipper truck and a long-term business strategy in 1996 is today a globally competitive enterprise, helping crop growers trade greater quantities of their products.

A leader in Australia’s agribusiness sector, Riordan Grains has been exporting to Asia for some time now. Grain Services Manager, Mark Lewis, says countries like China and Korea have emerged as huge export markets for barley.

’Ninety per cent of the barley we export ends up in China, and is used for stock feed and the brewing industry. South Korea is another large market for us, with products such as corn, maize, barley and malt barley exported.’

FTAs increase trade

Prior to the implementation of the China-Australia Free Trade Agreement (ChAFTA), the tariff on exported barley was three per cent. After the tariff was eliminated in 2015, Lewis says the company saw a significant increase in trade.

‘We know from our dealings with our customers in China that they are willing to pay a premium for Australian barley products over other origins on the basis of not having to pay the tariff.

‘And while we have a quality advantage in that market, the reduction of the tariff has meant that we’ve seen significant increases in barley exports to China, which ultimately benefits farmers in terms of the amount we’re able to pay for their barley.’

This surge in trade has also been a major contributor to the growth of the company, with employee numbers rising in the last five years.

‘The free trade agreements (FTAs) have given us more confidence to expand our business in terms of staff numbers and we now have 60 employees, where five years ago, we would have had only 30 or 40 in total,’ says Lewis.

Lewis adds ChAFTA has given Riordan Grains the opportunity to become a competitive player in global markets.

‘The eliminated tariff on barley has also meant we are now able to sell a higher-quality product at a more competitive price,’ he says.

Maintain vigilance and be proactive

While it all seems to be smooth sailing for the family-run business, Lewis admits Riordan Grains’ export journey hasn’t been without its challenges, with the company having to deal with regulatory authorities to meet the import requirements for their products.

Lewis says that by implementing proactive measures, the company has been able to address these issues as they arise.

‘It’s important to keep an eye on the export market, especially the unit price of the products you’re selling in the host country,’ he says.

Be culturally aware

Lewis says Riordan Grains has also learnt a lot about the cultural aspect of exporting, especially throughout its business ventures in China.

‘The Chinese have a long-term business view, which is something that we need to be conscious of in Australia when building relationships. However, this view does give us confidence in the market being there for a long time,’ he says.

Lewis adds the Chinese market has also matured greatly over the past decade in terms of business processes and setting up contracts.

‘They are far better at setting up Letters of Contracts, honouring them and paying for the product than they were 10 or 15 years ago,’ he says.

Spend time building strong relationships

In terms of advice for those considering exporting, Lewis says doing any kind of business should always focus on building relationships and offering a high level of service to customers.

‘It's a lot about relationships and we’re always encouraging our people to pick up the phone and talk to people or to visit the market and meet the customer,’ he says.

Lewis believes constant contact with customers is the most important factor for maintaining strong business relationships.

‘You have to develop that face-to-face relationship and ultimately have the capacity to pick up the phone and talk to someone when you’re needed.’

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