Free Trade Agreements the backbone of global success for Medtech company
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Since 1993, Austofix has been designing and manufacturing a, range of medical devices for patients around the world. Australia’s Free Trade Agreements (FTAs) are helping the company to grow through exports.
Austofix is one of Australia’s leading designers and manufacturers of orthopaedic trauma medical devices. Located in Adelaide, the company implements the manufacturing process from its purpose-built facility, including research and development, commercialisation, packaging, distribution and product support.
Specialising in innovative and world-class devices, Austofix’s range of products includes stainless steel and titanium plates and nails for use in bone fractures as well as instruments and patented Electronical X-Ray Free Distal Targeting Device (EzyAim). The company works directly with surgeons and medical professionals to deliver tailor-made products designed to reduce surgery time and provide better health outcomes for patients.
Exports help business growth
Having exported around the world for the past five years, Austofix is now one of Australia’s key contributors to the international medical technology industry. The company’s current export markets include China, the Middle East, Latin America and Europe.
International Business Manager at Austofix, Shahin Dashti, says exports have significantly contributed to the company’s growth, increasing sales and staff numbers.
‘We have seen immense growth over the last five years and exports have certainly played a role in that,’ he says. ‘Since 2014, we have increased our number of employees from 10 to 18 and sales have grossed approximately 10 times more.’
Tariff elimination equals more competitive in-market price
Austofix exports to a number of countries and benefits from lower tariffs provided by Australia’s free trade agreements (FTAs).
The China-Australia Free Trade Agreement (ChAFTA) has played a key role in the company’s success by eliminating tariffs on its products.
Since ChAFTA’s entry into force in December 2015, the 4 per cent tariff on orthopaedic devices has been eliminated, allowing Austofix to export its products to China duty free.
Dashti says the tariff elimination has allowed Austofix to make the price of its products more competitive in China, giving them a competitive edge over other brands in the market.
‘The tariff elimination under ChAFTA is extremely important to us, as it allows us to price our products more competitively in the Chinese market,’ he says.
Dashti says the competitive advantage provided by ChAFTA has also delivered more opportunities for Austofix to invest in other areas of the business.
‘Export sales in China have helped us bring some of the trade margin back into the company, giving us the opportunity to invest more money into other areas of the business, such as marketing or research and development.’
Be aware of different currencies
As an exporter, Austofix has experienced its fair share of challenges. Dashti says managing the currencies of different export markets, along with fluctuating exchange rates has been difficult to overcome.
‘In the early days, we had a price list in the currency of each of our export markets, but movements in the exchange rate meant our pricing was inconsistent,’ he says.
‘We’ve since learnt to price our products in Australian dollars. This means we can use the most up to date exchange rate when converting to the local currency. By doing so, our distributors have the flexibility to pay in a currency that suits them, while our prices remain fixed.’
Make use of the resources around you
Throughout the export process, Austofix worked closely with Austrade to research potential markets and build contacts through introductions with new customers.
Dashti says Austrade has been vital in helping the company start off on the right track.
‘When we decide to enter a new market, we gather as much information as possible beforehand to ensure we are well equipped to succeed,’ he says.
‘Austrade has been a valuable resource, providing us with insights and guidance on each market and the trading regulations that are in place. They have also connected us with potential distributors for each market, making it much easier for us to build our international networks.’
Dashti says Austofix also use their network of contacts to learn about new markets and understand any cultural barriers.
‘Distributors have a good understanding of the markets around them, so I often use our network of contacts as a source of information. They can provide insights into the culture of new markets and any barriers to entry you may face,’ he says.
The Australian Trade and Investment Commission (Austrade) is the Australian Government’s international trade promotion and investment attraction agency. Its Landing Pad program assists Australian scaleups to enter new markets abroad with introductions to strategic stakeholders and tailored business advice. Further information on the Landing Pad program, including how to apply, can be found here.
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