Working the land down under: part three.

Following is the final installment in a three-part series, as part of the Saskatchewan Trade and Export Partnership (STEP) Journalism Fellowship awarded to Sask Business editor Keith Moen. Moen traveled to Australia to explore the impact Saskatchewan-made agricultural equipment has made upon Australian dryland farming practices.

Immediately after arriving in Perth, West Australia, one of first orders of business was to take a three-hour drive southeast to the Katanning/Nyabing area. West Australia proved to be the closest thing to home, as its generally flat landscape lends itself rather nicely to the broad-acre farming practices that are prevalent in Saskatchewan.

One glaring difference between West Australia and Saskatchewan, however, is the definition for broad-acre farming. While Saskatchewan farms are limited by 160- or 640-acre parcels, West Australia has no such limitations. Therefore, their broad-acre farms are, well ... broad.

Indeed paddocks (Australian term for fields) can come in any shape or size, like a half-mile wide by 10 miles long, for example. This area was virtually settled by squatters, many of whom were able to buy the gum tree-forested land for $1 per acre, clear it and do with it whatever they pleased. The smart ones, like Ian Hill and his former neighbor and business partner, the late Chris Perry, used it to grow crops, and subsequently, grow their farms. This growth then led to other opportunities, which included an agricultural machinery dealership, Burando Hill.

Starting with domestic products in 1976, Burando Hill ventured into the importing business in 1985 when they reached an agreement with Farm King, a Manitoba-based product which now falls under the umbrella of the Buhler conglomerate.

Despite manufacturing their own lines of boom sprayers and grain carts, Ian Hill says that Burando Hill stuck with its philosophy of importing Canadian equipment because they found it was a good fit for their farms, for their company and for their market. This wasn't always met, however, with a ringing round of endorsement.

"We actually had farmers telling us initially, that if we were going to keep selling Canadian equipment, they wouldn't deal with us," says Hill. "But with farmers being who they are, the dollars became more important than their national view and their pride."

"Providing you're giving them good product and good support, the Canadian/Australian issue disappears."

Having said that, however, Australian manufacturers are aware of Canadian companies' presence in their homeland, says Vin Delahunty, executive director of the Tractor and Machinery Association of Australia. As it is in any industry scenario, Delahunty says that there understandably is a certain competitiveness in Australia's ag implement manufacturing sector. But, again consistent with competitive scenarios, the winner in the end is the consumer.

"They're not going to be walking off into the sunset hand in hand," Delahunty says of the relationship between the domestic and imported ag machinery manufacturers in Australia. "But the farmer has determined that whether that product comes from Saskatchewan or from Toowoomba, it is not going to be a final determining factor. It will be a factor, but not the definitive one."

Despite having somewhat of an uphill to climb, Saskatchewan agricultural implement manufacturers ventured forth. One reason was the realization that W.A.'s broad-acre farming practices provided the perfect territory for one-pass seeding equipment, which thanks to Saskatchewan-based innovators like Bourgault, Flex-Coil and Morris, for example, had become leaders in the field.

Ironically, air seeding technology is an Australian invention, and it continues to be a large factor in the Australian manufacturing sector. Yet Canadian, and particularly Saskatchewan, air seeding manufacturers are among the largest of machinery exporters to the Australian market. Jason Rodda, who as manager with McIntosh and Son of Katanning, W.A., is one of the largest importers in West Australia, says there's a simple reason for that.

"The quality of the product that comes from Canada is very good," says Rodda. "Australian manufacturers are getting there (closer to matching Canada's quality), but certainly they're driven or forced by Canadian machines coming in."

"And the second part is that the (Canadian) machinery has a very good resale value," Rodda continues. "People are very happy to buy a machine that has been put together well and lasts well because of that. So the second-hand market is very buoyant."

Peter Bach operates a 3,000-acre farm near Toowoomba, Queensland. Prior to last year's seeding season, he bought a Never Pin seeder from Morris, which he used to plant his wheat and barley.

"It proved itself," says Bach. "I've heard you guys make some good machinery over there, so I had no problem in buying machinery from Canada at all."

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Some Saskatchewan companies, like Schulte (featured in Part 1), Bourgault and Morris have intensified their presence in the Australian market by establishing roots Down Under. Bourgault has established an assembly facility in Armadale, W.A., a suburb of Perth. This facility is being utilized for assembly and parts warehousing, as well as sales and service. Bourgault also established a second distribution centre in Parkes, New South Wales, to accommodate the eastern states. Morris on the other hand, has its own warehousing facility in Toowoomba, Queensland.

"We always seemed to maintain a presence on the east coast," said Donnie Kirkwood, international sales manager for Morris Industries, adding their presence in Toowoomba has likely played a large role in that fact. "But about eight years ago McIntosh came over to Canada and got a feel for our products, and they started to distribute it on the west coast."

Kirkwood is perhaps one of the most foremost authorities on Saskatchewan's presence in the Australian market. Since 1998 he's been spending between 200 to 250 days per year in Australia. When asked what's a requirement for doing business Down Under, without hesitation he replies "support."

"You have to have support--back-up in parts and technical support," he specifies. "You have to have that in the country. You can't say, 'I'm sorry, in 18 hours you can phone our factory and get some technical support,' in response to a concern. And in turn, you have to have good parts back-up in the country because it's very expensive to start air freighting components."

But with a 28-day turnaround time to get containers shipped overseas--from port to port--it's evident that significant lead time has to be factored into anything related to Saskatchewan's ag exports. And of course, getting the product over-seas doesn't come cheaply either. But at least the Saskatchewan manufacturers can work the shipping costs into their pricing and still remain competitive within the market.

Steve Allen, assistant operations manager with Bourgault (Australia), estimates that Australian farmers have to pay approximately 30 per cent more on average for their equipment than what Canadian farmers would pay for the same piece of equipment. Where Australian farmers are able to make up for this higher capital cost, however, is in their freight costs, or lack thereof.

"Although the capital cost is higher, your variable costs are lower," says Allen, a Saskatchewan expatriate. "Fertilizer (costs) would be much the same, seed would be much the same, but I think we've probably got less risks here."

"But the real advantage the Australian farmer has got that we (Canadians) don't have is their cost of freight to get it to an export position would be somewhere in the order of, in W.A. here, of $12 per tonne. Whereas we're very often paying that (in Canada) just to get it to an inland terminal. Then you got to get it from there to a lakehead or to Vancouver."

The overall affluence of Australian farmers, which has been diminished somewhat in recent years due to drought, is not the only appealing aspect the Australian market holds for Canadian manufacturers. There are other factors taken into consideration, not the least of which is the ease of communication.

"First of all, it's English-speaking, which makes it way easier than any other market that we've tried to get into," explains Avril Goodfellow, marketing manager for Highline Equipment in Vonda. "There is a real affinity between Australians and Canadians. And they really like Canadian machinery, it's well-accepted."

"It doesn't feel like it's any farther away than Ontario or Quebec, really," she notes. "The time change is the only really difficult thing to deal with. There's only about a half-hour that you can actually be in the office at the same time."

"It's a very good match for our farming products," concurs Don Henry, general manager of the Agricultural Products Division of Brandt Industries Ltd., who, like myself, was introduced to Australia while traversing the country from Ag-Quip in Gunnedah, New South Wales to Dowerin Field Days in West Australia. "Virtually everything we produce at home has an application for this market. So even though it's on the other side of the world, there are some real synergies for us to capitalize upon."

By and large, Saskatchewan agricultural equipment manufacturing companies who have done their homework and undertaken the due diligence associated with establishing a new market are reaping the rewards of their hard work and entrepreneurial drive. It's not without a certain level of pride and awe that a homegrown Saskatchewan boy like myself can go over there and experience this phenomenon firsthand, and in true Australian fashion, can look at each of these Saskatchewan success stories and say, 'Well done, mate, well done.'