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Using Innovation to Increase Productivity & Grow Export Markets – Australian Industry Case Studies: 

Using Innovation to Increase Productivity & Grow Export Markets – Australian Industry Case Studies Wallace Chang Account Manager - North ASIA Sept 2003

From Statutory Authority to Publicly Listed Company: 

From Statutory Authority to Publicly Listed Company In 1939… Previous Australian Wheat Board Set up by Australian Gov’t in 1939. To market all Australian wheat exports. Now… Publicly listed S&P/ASX 100 Australian company in Sydney Stock Exchange; Grower owned Head office in Melbourne Five Int’l offices : Tokyo, Hong Kong, USA, Egypt and Europe. Employs approx 500 staff. AUD3 billion export value. Exports to about 50 countries Australia has NO government’s domestic support programs like other competitors.

China has recognized the unique characteristics of Australian wheat for many years: 

China has recognized the unique characteristics of Australian wheat for many years 3 4 5 6 7 8 1969- 1971 1976- 1979 1982- 1984 1988- 1990 1994- 1996 AWB imports in MMT to China

Slide5: 

AWB involves in all facets of Wheat Value Chain

R&D Investment – Agrifood Technology Pty: 

R&D Investment – Agrifood Technology Pty Government approved laboratory; Achieved AS/NZS ISO 9001:2000 Certification; Quality Assurance laboratory for AWB Wheat Quality, Wheat Milling, Flour Quality, End-products Evaluation.

Listen & Communication: 

Listen & Communication R&D with Customers and Customers’ Customers Communication & operation with Wheat Breeders

Classification of Wheat Varieties: 

Classification of Wheat Varieties All new wheat varieties are evaluated and classified into Marketing Classes by AWB. Classification depends many Quality Parameters including: Physical Attributes Chemical Composition Milling Quality Gluten Quality Starch Quality End Products Suitability

Fm FAQ to Quality Grain Made to Order: 

Fm FAQ to Quality Grain Made to Order 1939 – one class fair average quality 1974 – five classes APH, AH, ASW, AGP, Feed 1990s – 45 plus market based grades & segregations

Quality Assurance: 

Quality Assurance Superior Grade 1 Wheat Quality Dry, White, Large grained varieties; Naturally Clean – low % of impurities, small & broken grains, stones and dust. GMO free. Strict Receival Standard: Developed over 60 years Annual review to reflect changing demands Differentiate the crop Protein Cleanliness Test weight Defects such as sprouting, black point & frost Wheat not conforming is downgraded to lesser quality

Accurate and objective testing: 

Accurate and objective testing Accurate and objective testing at receival is the cornerstone of the industry Traditionally test weight, moisture screenings, visual contaminants NIR measured protein of every delivery Now pursuing hardness, amylase levels, dough properties Heavy burden on growers to comply Heavy penalties for failure

Intensive Segregation & Stock Selection: 

Intensive Segregation & Stock Selection TICKET-BY-TICKET receival testing Computerisation Centralisation NATIONAL ACQUISITION REGIONS Most suitable wheat to each customer

AWB Golden Rewards: 

AWB Golden Rewards New payment structure launched in 2000/01 With object to deliver every participants equity in the Pool based on the actual quality of wheat received. Depending ticket-by-ticket policy Each ‘wheat pay grade’ include active payment scales for Protein content, Screenings levels and Moisture content.

Innovative Payment Options for Growers : 

Innovative Payment Options for Growers

Competitive Ocean Freight Supplier: 

Competitive Ocean Freight Supplier AWB involved in Chartering in early years. AWB Chartering provides competitive sea freight services for Australian wheat; Being active in the market. Handled over 6 MMT ocean freight. AWB sells about 40% of wheat with ocean freight component. Flexible: Voyage Chartering Time Chartering Combination Shipments Containers

Supply Chain – Grain Centers: 

Supply Chain – Grain Centers With objective to reduce Supply Chain Cost, AWB invests in domestic supply chain infrastructure; To move grains from paddock to international customer as efficiently and effectively as possible. AWB constructs Grain Centers in VIC, NSW & SA. 7 receival centers existing receiving 615k MT in 2001/02 9 centers under construction.

Effective Grain Terminals: 

Effective Grain Terminals AWB invests in the Melbourne Port grain terminal, which continued to perform well with 1.3 MMT of grain exported. Reduce cost to growers and provide commercial return to shareholders.

Rail Freight: 

Rail Freight AWB joint venture with rail freight company Invest into NSW rail and grain consolidation facilities AWB purchased a set of 51 high capacity rail wagons to significantly improve grain haulage services

Wheat Purchasing Options to meet Customers’ different market view: 

Wheat Purchasing Options to meet Customers’ different market view AWB provides buyers difference buying option: FOB CFR Basis Risk Assist

Technical TrainingEnsure the value of Australian wheat is understood: 

Technical Training Ensure the value of Australian wheat is understood Grain industry orientation On-shore Professional development program - Milling practices - Noodle Technology - Baking Technology - Laboratory methods - Storage & hygiene Collaborative Research with customers Off-shore Australian Wheat Seminar – once every two years in China. Technical servicing on mill-by-mill basis by Millers, Food technologists & Cereal Chemists.