THE so-called “mining to dining’’ boom is expected to be a significant driver of deal flow in the Asia-Pacific not only for the next decade, but also quite possibly through to 2030 at least. Such changes as a move from minerals to food take a while for many commentators and investors to get used to, as the evidence of previous changes shows.
For instance, some of the most successful international investments made around 2004 spotted how important massive capital expenditure in China was going to be to mining and energy companies in Australia and Canada.
The sectors had underperformed in the 1990s and in 2004 commentators were looking the wrong way, failing most particularly to recognise this sea change and the imminent correlation between Australian and Canadian supply, and Chinese demand.
Those who did see this opportunity yielded strong returns in those following years. The Australia in China’s Century conference, hosted by The Australian, will discuss how important these investments were for the economy and how they have advantageously positioned us for future Chinese and regional opportunities.
The best returning investments have been those that not only position us to meet the needs of today, but have also placed us in prime position to supply the demands of tomorrow.
The ultra-high-net-worth investment community, highly conscious of this, has been questioning where these future demands lay and how Australian or regional businesses could service these demands, and invest accordingly.
The common wisdom, no less wise for being common, is that, both in demand and supply, regional agribusiness is the answer.
In light of the fact Australia lacks the scale of other Pacific Rim nations (namely the US) and cannot yet become the “food bowl” of Asia, it could nevertheless discover its competitive edges and meet many future demands.
The UHNW community knows that individual investors can both drive these initiatives and capitalise on market shifts regardless of whether the Australian dollar is high or low.
They believe Australia can find this edge via deeper virtual integrations in what is an extremely fragmented and at times dislocated international agricultural demand-and-supply chain.
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