Regional insights

As we begin 2021, there is a confident outlook that business with the Middle East, Africa and Turkey (MEA) will continue to improve.

Victorian businesses maintained strong connections with partners across the region in 2020 and achieved outcomes in areas where Victoria maintains its competitive strengths including in food and fibre and education.

While challenges remain ahead, opportunities will continue to grow in 2021 in premium food, mining and METS, education and eCommerce. Victorian businesses are encouraged to continue to assess their sector, pursue targeted market entry strategies.

Opportunities in 2021 for Victorian exporters in the MEA region   

Emerging opportunities for Victorian exporters in the MEA region cover a range of sectors that include food and fibre, mining and METS, online learning and eCommerce:

• One of the largest opportunities for existing and new exporters to the region is in eCommerce. The rapid uptake of eCommerce platforms in the region over the last 12 months means it is now easier for Victorian retail, health and beauty, and food and beverage brands to get their products to market.
• Demand for food and fibre products, including commodities and premium food products, remains strong across the region. Saudi Arabia is liberalising its barley market and this presents a major opportunity for Victorian barley exporters.
• Opportunities for mining and METS companies exist across the region, especially in Russia, Sub-Saharan Africa, and Saudi Arabia as the Saudi Government is investing heavily in its burgeoning mining industry.
• Demand for online learning tools will remain strong in 2021, especially in the Gulf Cooperation Council (GCC). With changes to demographics in GCC nations, vocational and graduate training as well as skills assessment will be needed to upskill nationals.
• Demand for health technologies has surged across the MEA region, particularly in the GCC, where opportunities exist for AI and cutting-edge healthcare technology, that can assist local governments to reduce costs and optimise healthcare operations.

Victorian food and beverage companies continue to experience great outcomes exporting to the Middle East and North Africa

In an example of Victorian food and fibre export success, artisan food producers Mount Zero Olives and Asterisk Kitchen secured contracts to begin supplying their products to Jones the Grocer, a gourmet food emporium with 15 stores in the UAE.

Melbourne’s famous coffee culture was on display at a coffee diplomacy event run by the Victorian Government Trade and Investment (VGTI) Dubai office for United Arab Emirates (UAE) business people and alumni of Victorian universities.

Melbourne coffee company, St Ali joined with a local UAE barista to showcase coffees with beans roasted in Melbourne, using Victorian milk. This event was a great chance to discuss business opportunities and grow Victoria’s and the UAE’s coffee connections.

To help maintain market share amid air freight disruptions in 2020, Global Victoria supported Victorian food and fibre exporters to access the Federal Government’s International Freight Assistance Mechanism, an emergency measure that provided funding to help keep international freight routes and flights operating into and out of Australia, to help keep Victorian goods flowing to the region.

Victorian EdTech and education providers are well placed to respond to the strong demand for online educational tools across the Middle East  

Through discussions with Dubai’s Knowledge and Human Development Authority (KHDA), the VGTI Dubai was successful in approving four Victorian EdTech companies (Curio, TALi Health, Mindsets and Cool Australia) and promoting their capabilities on the KHDA’s online learning portal. In addition to these companies, Geelong Grammar School’s Institute of Positive Education has also been included on the KHDA online learning portal. Geelong Grammar has been providing remote learning wellbeing resources for schools in the UAE.

The year 2020 saw the demographics of GCC nations change and the rise of governments hiring more UAE citizens to perform more traditional roles held by international workers. In the medium to long-term, this will bring opportunities for Victorian providers to assist with up-skilling or re-skilling nationals under such initiatives as the UAE’s National Capacity building Strategy for Sustainable Development.

Victorian businesses experience success as they enter the Middle East eCommerce market

The VGTI Dubai has established relationships with Amazon MENA and Noon to help Victorian companies register their products on these large eCommerce platforms.

• In September 2020, Global Victoria ran a webinar with Amazon MENA to explore listing options for Victorian businesses to access eCommerce opportunities.
• In October 2020, Global Victoria partnered with Austrade to run a similar webinar with Noon, the second largest eCommerce platform in the region.

These activities are opening doors for Victorian businesses in the retail, food and beverage, fashion, and health and wellness sectors to begin exporting to the UAE and Saudi Arabia.

eCommerce sales boomed across the region in 2020, growing by 36 per cent in the UAE and 20 per cent in Saudi Arabia alone. It is anticipated that online shopping habits developed during 2020 will continue into 2021 as citizens and residents of the UAE and Saudi Arabia become accustomed to the convenience and safety of online shopping.

The growth of these opportunities allows Victorian businesses to easily enter markets in the Middle East and utilise the logistics infrastructure provided by the eCommerce platforms.

The Victorian Government's Export Recovery Package will support business engagement with the region in 2021.

On 13 September 2020, the Victorian Government announced the $15.7 million Export Recovery Package (ERP) to address logistics and supply chain issues caused by the pandemic and establish new export channels.

As part of the ERP, businesses will be connected to international markets through virtual trade missions.

To ensure Victorian companies have the insights they need to begin or expand their operations in the Middle East, Africa and Turkey region, the VGTI Dubai is planning a range of activities across the key industry sectors of:

• food and fibre
• mining
• METS
• education.

Expo 2020 Dubai

Expo 2020 Dubai will also begin in October 2021, after being postponed last year. Victoria is the only platinum sponsor of the Australian Pavilion at Expo 2020 Dubai, and Global Victoria is working with the Federal Government to develop an impactful program of events for Victorian businesses.

Additional market insights

The Department of Foreign Affairs and Trade has released its 2021 Market Insights, which provides exporters with detailed analysis of business conditions and opportunities in a number of countries in the Middle East and Africa. Whether you’re an experienced exporter or are just getting started on your export journey, these insights are a quick and easy way to understand markets you’re interested in.

Winter 2019

As announced by the Minister for Jobs, Innovation and Trade Martin Pakula in June 2019, Victoria is a Major Partner with Australia for World Expo 2021 in Dubai. This provides a unique opportunity to showcase the best of Victorian research, innovation and creativity to international audiences.

The Expo will take place over 173 days (20 October 2020 – 10 April 2021), include 193 country pavilions and is expected to generate over 25 million visits. Victoria’s involvement will include leading delegations to relevant trade shows and fairs that coincide with the expo, as well as opportunities to be involved in Australia’s cultural program.

Several Victorian businesses have already been engaged by the Expo 2020 organisers to deliver projects:

• GHD has been engaged to design the fire, ambulance and police facility
• Woods Bagot is the infrastructure design consultant for the Conference and Exhibition Centre Campus
• Cox Architects is the design consultant for the Opportunity Pavilion
• Aconex will design the IT Document Management System
• Rosterfy won the contract to provide an event workforce management solution platform, to support Expo 2020 employees and volunteers.

Victorian companies have also been engaged to by DFAT to work on the Australian Pavilion:

• Icon/Acorn Alliance will deliver the marketing and communications strategy for Australia’s presence at Expo
• Schiavello will be the official furniture supplier for the Australian Pavilion
• Melbourne-based event management company IVG has partnered with Thinkwell Group to form TVG, which will operate the Australian Pavilion for the six months of Expo.

Victoria punches above its weight in food exports to the Middle East and North Africa (MENA)

Victoria is the largest agriculture producer in Australia and MENA and Turkey are important markets for our food exports. In 2018, Victorian businesses supplied $1 billion worth of food products to the region. The products exported range from meat, sheep meat and beef, cheese and other dairy products, grains and pulses, vegetables, fruits and nuts and prepared foods. Sheep meat, predominantly lamb, accounts for 55 per cent of all Victorian exports to the region (valued at A$555 million). In each of the top 10 MENA sheep meat markets, Victoria has over 50 per cent share, with one, Iran, at over 86 per cent.

Increase in UAE education infrastructure spending presents opportunities for Victoria

The Victorian Government Trade and Investment Office (VGTI) in Dubai is observing an increase in United Arab Emirates (UAE) government spending on research and development with international partners. In 2018 the education sector received Dh10.4bn (US$2.8bn) from the federal budget to help build better infrastructure and improve research facilities. The VGTI is exploring the opportunities this is creating Victorian universities.

UAE expands list of taxable products

The UAE Cabinet has announced an expansion of the excise taxable products to include sweetened beverages and electronic smoking devices starting on 1 January 2020.A tax of 50 per cent will be levied on any product with added sugar or other sweeteners including beverages, liquids, concentrates, powders, extracts or any product that may be converted to a drink. Beverages exempt from this new tax include ready-to-drink beverages that

• contain at least 75 per cent milk or milk substitutes
• are consumed for special dietary needs
• are consumed for medical use and
• baby formula or food

Electronic smoking devices and the liquids used in them will attract a tax of 100 per cent, whether they contain nicotine or tobacco or not. The UAE Government states that this decision aims to reduce the consumption of products that are harmful to human health and the environment.

New opportunities for connection between Victoria and Israel in biomed and fintech

The Minister for Priority Precincts, Gavin Jennings announced that an Israel liaison officer will be based at Parkville’s Biomedical Precinct as part of a grant between the Department of Jobs, Precincts and Regions and Melbourne University. The liaison officer will work across Victoria’s entire biomedical sector, including other universities, research institutes and industry to support research collaboration and commercialisation opportunities within the Victorian and Israeli biomedical sectors.

In late June 2019, the Young Australia Israel Chamber of Commerce ran a fintech trade mission for a group of emerging leaders from Australia. The delegation was led by Charlotte Petris, co-founder and CEO of Victorian based company Timelio, Australia’s leading invoice and supply chain finance platform. Charlotte is also a member of the Australian Government’s FinTech Advisory Board. Throughout the mission delegates had the opportunity to connect and collaborate with young Israeli entrepreneurs and learn about new technologies and innovations coming out of Israel including blockchain, cryptocurrency, cyber security and payment fraud and more.

The Australian Government responds to events in the Strait of Hormuz

Tensions have heightened in the Strait of Hormuz, an important shipping lane for crude oil. In response, the US and UK have bolstered their naval presence in the region. In August 2019, the Prime Minister announced that Australia will be joining the US led coalition in the Persian Gulf on a six-month mission.

The events have not substantially impacted Victoria’s trade in the region at this stage. The Dubai VGTI will continue to work with DFAT to monitor the situation.