Transcript: A video case study on Macadamia Marketing International (MMI)

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>>Voiceover: Native to Australia, macadamias are popular with consumers around the world and are exported to more than 40 countries.

The demand has increased in recent years as health-conscious shoppers – particularly in Asia – seek out our clean, green and nutritious produce.

And Australia is well placed to meet this demand.

Under the free trade agreements with China, Japan and Korea, tariffs on macadamias were eliminated or will be phased out.

Australian producers like Macadamia Marketing International are now in a strong competitive position to supply North Asia, creating exciting new growth and job prospects in this industry.

>>Larry McHugh: I’m Larry McHugh. I’m General Manager of Macadamia Marketing International.

Macadamia Marketing International is the largest single seller of macadamias around the world, supplied by two processing companies, one in Bundaberg and one in Lismore in New South Wales, which is where our headquarters are.

We sell 40 per cent of the Australian crop and about 15 per cent of the world’s crop.

We started exporting in 1986 and have been growing ever since. We export to Japan, Korea, China, and about 20 other countries around the world.

>>Voiceover: Under the Korea Agreement, the 30 per cent tariff on macadamias will be completely phased out.

>>Larry McHugh: Since the Free Trade Agreement there’s been massive change in Korea. Suddenly the interest has skyrocketed, sales have doubled and we see a very bright future for Korea.

Australia already had a strong foothold in Korea because they prefer Australian kernel but the Free Trade Agreement now means that our kernel is going to be about 30 per cent cheaper over five years. So it essentially means that no-one can compete with Australia going into the Korean market and that we will have a very, very strong foothold in that market.

>>Voiceover: Since the Korea Agreement entered into force, macadamia exports to Korea have tripled.

>>Larry McHugh: As a company we’ve moved from 100 tonnes last year into that market to 250 tonnes this year and we believe that we can get double – double growth each year for at least the next five years. So over five years we expect that we’ll be selling over 1,000 tonnes into that market.

>>Voiceover: The Japan Agreement has eliminated the tariff on macadamias.

>>Larry McHugh: Japan has always been a very good market for Australian macadamias. There’s a strong preference in the Japanese market to buy Australian kernel. The Free Trade Agreement is going to reduce the cost to the Japanese of Australian kernel and it’s going to give us a better stronghold in that market.

What we’ve found is that people are trying to consolidate their position in that market, so we’ve got people trying to do long-term contracts with us now as they realise that Australian kernel will be the way to go for them in the future.

>>Voiceover: The free trade agreement with China is also expected to boost exports, with the 24 per cent tariff on macadamias to be eliminated.

>>Larry McHugh: The trade agreement with China is going to be one of the most significant things for the Australian industry. Macadamias are becoming extremely well known in China now and in order to kick it along it really needed this Free Trade Agreement.

We think the Free Trade Agreement is going to allow us to sell a whole lot more kernel into that market and it will probably become by far the biggest market. It already is the biggest market for macadamias in the world but we think it will double, triple or quadruple over the next five to ten years and will become the major market for macadamias around the world.

My advice to other businesses is to get out there and look at the opportunities. The FTAs are helping us develop our businesses overseas and there’s a lot of opportunities out there, some you wouldn’t even know unless you get out there and see. So get out there and have a look and I think you will find that these FTAs help you.

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