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Australian Corporates look to ASIA for growth, WHY?

By: admin|

Two of Australia’s largest Banks being the Commonwealth Bank and ANZ have hastened their move into the ASIA market given the latest ACCC ruling which has prevented the National Australia Bank from buying AXA, at this stage.

Lets put things into perspective and that is Australia has a population of only 22 million yet to the north of us 60% of the world’s population resides and their Banks and Corporations have less restrictions placed on them and some of the larger countries being India and China are experiencing double-digit growth in their economy. One sixth of the world population live in each of those countries and hence the size of their Banks should bring a clear understanding to us all that we also need to have large corporations operating in Australia. This cannot be achieved without mergers.

If Australia is to ever reach it’s potentially both via internal growth, development and globally then all corporations must be able to act in a way that growth is not a controlled process. Large overseas Banks have already applied and had approvals for them to open up in Australia and their balance sheets make the traditional “Big 4” look very small, in reality.

Four Pillars idea went out the window as soon as globalisation became a reality, if we are to compete on our own soil and to make a difference into offshore markets it requires size in many areas to be successful. Size cannot be achieved in this market unless corporations are free to merge and grow internally. How will we compete against the super Banks that have a lot cheaper cost of funds available to them and yes this market is very attractive to them given the returns our relatively small organisations are achieving.

The Australian retail space is also under pressure since the opening of two large overseas players and others will follow and competition is fantastic for the consumer, it is not a threat as is being portrayed. Our larger retailers are also now looking to ASIA for growth given this small pond in which we feed from is becoming over fished.

The world has now become countries without boarders and we must allow growth and development to happen as we are now in a time that is different from yesterday.Growth and competition from other countries will have effect on us. So how do we prepare for the changes ahead, relax and let companies grow internally so they can also compete on a level playing field globally.

Some other thoughts that come to mind are;

* What happens with the Australian Corporates that do make it overseas and become very large players, will they be able to operate freely in Australia without direction and controls?

* Will those large Australian corporates that experience large growth offshore, stand upon the mountain and look back at Australia and say what is the value of focusing on the smaller restrictive market and hence that in itself can also affect the consumers in Australia as the focus of our own companies will be elsewhere.

What cannot be achieved in Australia, will be achieved offshore, so what could Australia really look like , will we ever know?

Author Jeff Mazzini MD AAMC Training Group.

One thought on “Australian Corporates look to ASIA for growth, WHY?

peter April 23, 2010, 4:44 am


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