Victoria and its capital Melbourne produce more than a quarter of Australia’s economic activity.

	Area:	227,420 sq km
	Population:	4,829,000
	as % of total:	24.9%
	Capital:	Melbourne (population 3.45m)
	Gross State Product:	A$164.38bn (2000/2001)
	as % of total:	25.6%
	State Final Demand:	A$158.47bn
	SFD growth:	5.1% (2001)
	Credit rating (S&P):	AAA
	Average weekly earnings:	A$653.60 (08/2001)
	Unemployment rate:	6.0%

A long tradition of internationalisation in the Victoria business scene has created a vital global network for new companies establishing there. The capital Melbourne is highly competitive with other leading Asian cities, and is one of the best ‘wired’ cities in the world, with wide-band optical fibre within 100 metres of every major office location in the city.

Victoria is Australia’s second smallest state, but produces more than a quarter of its economic activity. It is Australia’s manufacturing heartland, dominating the country’s automotive industry, and aiming to clean up in the biotechnology sector as well.

Victoria is also one of the nation’s main food bowls, producing more than 80% of Australia’s dairy exports and more than half its processed fruit and vegetable exports. It is services, however, that account for almost 70% of the state’s gross product – Victoria has thriving knowledge-based industries, as well as strong finance and education sectors.

Biotechnology
Victoria is aiming to be one of the world’s top five biotechnology centres by 2010, and the Victorian Government has committed A$320m over four years to see its prophecy reach fruition. Victoria is set to be home to Australia’s first synchrotron, based at Monash University in Victoria. The Government is joining forces with Monash University and other project partners to enable the construction of the A$157m facility to commence in 2001/02. It is expected to provide a massive boost to Victoria’s position as a global leader of biotechnology and scientific research.

The synchrotron will add to the high-technology base of the south-east region of Melbourne, which already has world-class research facilities. These include Australia’s largest indus-trial concentration of IT&T, scientific and medical facilities, about 20,000 advanced manufacturing jobs and a concentration of top researchers at Monash University, CSIRO and 1000 medical researchers at the Monash Institutes of Health.

Between January 1999 and June 2001, 33 new biotechnology enterprises were started up in Victoria, representing 40% of new biotech start-ups across Australia. Victorian companies comprise more than 50% of the total market capitalisation of the Deloittes Biotech Index – with a total market capitalisation exceeding A$7.5bn.

Health dominates Victoria’s biotechnology sector: 58% of companies operate in this area. Victoria is home to Australia’s largest biotechnology company CSL Ltd, as well as the Institute of Drug Technology Australia, Virax Holdings and AMRAD Corporation.

Service-based industries
The state’s vast services sector has particular strengths in finance and treasury, marketing, training, technical support, data processing, call centres and related corporate and customer support functions. Companies to establish such operations in Victoria include Lufthansa, Credit Suisse/First Boston, Shell Services International, Ericsson, Oracle and Daiwa Securities.
Victoria has a well-established call centre industry, with more than 400 centres ranging in size from small IT help desks to large-scale telesales and customer support facilities. Victoria’s multilingual population provides a talented pool of staff to support domestic and international call centres, while the region’s excellent infrastructure provides large-volume good-quality calls at a reasonable cost, and prime CBD office space at competitive prices. Major centres have been established by global leaders like Hertz, Diners Club, United Telecommunications, Oracle and Foxtel.

Victoria’s financial services industry employs more than 92,000 Victorians and has grown by 32% since 1992. It includes two of Australia’s major banks headquartered in Melbourne – the National Australia Bank and the ANZ, which is targeting growth in developing countries, particularly in Asia. Both also have a strong presence in accounting, legal support, IT and financial markets consulting areas. These are joined by nine foreign banks, eight investment/ merchant banks and 13 bank representative offices, plus a wide range of financial brokers and consultants, trade financiers and money market lenders. The Australian Securities and Investment Commission (ASIC) is also based in Melbourne and the Australian Prudential Regulation Authority has established a Regional Office in Melbourne with responsibilities for Victoria, South Australia and Tasmania. Large international financial service companies with their Australian operations based in Melbourne include AXA, CS First Boston, Vanguard and HSBC Asset Management, OCBC, GE Capital, Standard and Poor’s, and SSB Citi Asset Management.

Dun & Bradstreet is one global company with its regional base in the city. A world-leading provider of business-to-business credit information, marketing, purchasing, receivables management and decision support services, Dun & Bradstreet is supported by its Asia Pacific Information Centre (APIC) in Melbourne. The centre grew out of a major computerisation project in the early 1980s, so successful that it became a support centre for the entire Asia-Pacific region, including Japan, China, Taiwan, Singapore, New Zea-land, Australia and Latin America. APIC employs 50 staff in Melbourne.

Manufacturing heartland
Victoria is the home of Australia’s automotive industry. With key assemblers, component companies, design houses, toolmakers and other service providers located there, Victoria is responsible for over 60% of national automotive output. Its automotive industry sector currently employed around 30,000 people, generates A$9bn in economic activity, and provides a major market for hundreds of millions of dollars in related goods and services. Ford Motor Company will invest A$500m in Victoria to develop a new vehicle line, which will be launched in 2004, while Toyota Australia employs 4100 Australians, with head office, manufacturing and engineering activities all located in Melbourne. Toyota Australia recently consolidated vehicle production at its new A$420m plant at Altona, Melbourne, now a world-ranking facility in terms of ‘lean’ manufacturing technology and processes.

Food processing is Victoria’s largest manufacturing industry, with more than 2000 food processors operating in the state. Victoria dominates Australia’s production of dairy produce, fruit and vegetables, cakes and biscuits, confectionery and pet foods, also providing a substantial proportion of the nation’s crops and livestock. The state’s food exports exceed A$4bn. Strong growth will continue as exports to global markets keep expanding. Europe is a large market for wine and the USA for meat.

Ten of the world’s largest food companies are located in the state of Victoria, including names such as HJ Heinz, Kraft Foods, JR Simplot, Effem Foods, Cadbury/Schweppes, Nestlé and Campbell’s.

One new investor is Terra Harvest Foods. The Victorian Government has worked closely with the Japanese-owned rice snacks company to secure the new manufacturing plant and Australian head office in Melbourne. The new plant will allow Terra Harvest to capitalise on Australia’s rapidly-growing demand for rice snacks, which has increased tenfold over the past four years. The new plant will also be an export base.

In food and related sectors, the most attractive opportunities for investment and joint ventures are in meat pro-ducts, dairy products, processed fruit (including fruit juice), vegetables, cereal-based products, pet food, snack foods, confectionery and wine.

At the heart of things
Victoria’s capital, Melbourne, lies at the centre of a triangle linking Sydney, Adelaide and Hobart, an area which contains 70% of Australia’s population and most of its economic activity.
A network of modern arterial roads and freeways connects Melbourne to all points within this triangle and beyond, providing fast, cost-effective transport for goods and people. Major projects, such as City Link, are upgrading the network in urban areas. Victoria’s road freight services are equal to the world’s best, with some 110,000 trucks moving some 250m tonnes of freight annually.

Excellent logistics enable quick and cost-effective distribution by air and sea to world markets. Melbourne International Airport is Australia’s only major airport that operates 24 hours a day, handling more freight than any other airport in Australia. Airfreight rates are very competitive, making Melbourne a high-speed low-cost base for air freighting products to the Asia Pacific. Food exporters to the UK are currently experimenting with new modified atmosphere packaging, combined with the innovative use of air freight from Australia to Asia then transhipment to sea freight from Asia to the UK, drastically cutting shipment times for fresh produce.

The Port of Melbourne is Australia’s largest and most modern container port, operating 24 hours a day and handling 40% of Australia’s overseas container trade. Container handling rates are among the best available, and turnaround times have been halved in recent years.

Victoria provides access to competitively-priced manufacturing inputs and raw materials. Power costs are low, high quality water is readily available, and industrial gas costs are low due to the proximity of Bass Strait gas fields.

Advantage Victoria
Victoria’s time zone is just two hours ahead of Singapore and Kuala Lumpur and one ahead of Tokyo, as well as overlapping with the business hours of the US west coast. This is just one
reason the state and Melbourne offer all that investors need for a regional headquarters, service centre, research and development facility or major manufacturing operation with Asia-Pacific markets as the goal. The region also offers a highly educated workforce with a large multilingual population.

This stable, international orientation of business, legal and regulatory environments provides consistency and encouragement, while protection of intellectual property is strongly based in law without stifling creativity. The result is an open, predictable, internationally acceptable business environment for both the established corporation and the new investor.

Resources
As Australia’s most compact state, distances to resources or to market are relatively small, making it more cost-effective to get export products to airports and seaports. Victoria has major resource strengths in agriculture, forest products and energy.

Agribusiness. Victoria is the nation’s major food growing region, with a specialisation in dairy products, vegetables and fruit, wheat and other major crop varieties. The clean and green growing environment and the ready access to high-quality raw materials has been the foundation of internationally-competitive food processing operations, both in metropolitan and major regional centres.

Forest products. Victoria’s natural forest and plantations of hardwoods and softwoods are the foundation of a strong forest products sector. Timber processing and paper manufacturing are major activities, which are continuing to expand.

Energy. Victoria’s electricity sector delivers energy at competitive prices, while its large-scale offshore oil and gas platforms deliver around 85% of Australia’s oil needs and 55% of its natural gas.

Investing in R&D
Victorian companies account for 38% of all Australian R&D undertaken by business and its research strengths are a key attraction for international companies. Victorian expenditure on innovation from 1994 to 1997 was 42% of the national total (R&D accounting for 50% of innovation spending), while Melbourne has the nation’s most important public and private sector research establishments in a range of industries including information technology, telecommunications, food, paper, chemicals, petroleum, transport equipment, electrical equipment and biotechnology. The state’s ratio of scientists and engineers to total population is higher than that of South Korea, Singapore or the United Kingdom.

Victoria’s regions
With nearly 1.3m people, regional Victoria accounts for 30% of the state’s population, about a quarter of the state’s manufacturing turnover and most of its agricultural and mining production. Manufacturing strengths include food processing, basic metal production, non-metallic mineral products, textiles, paper and wood products, as well as chemical, petroleum and coal production. Agricultural strengths include wheat and other cereal crops, dairy and beef cattle, wool, vegetables, citrus fruit and grapes. Significant mining activities include oil and gas production, brown coal and gold.

Investment assistance
The Department of State and Regional Development is the Victorian government’s lead agency for attracting and facilitating investment into the state, delivering its services through specialist divisions and a network of offices in overseas locations. It can put together special investment assistance packages to attract new business and expand existing business and is involved in fast-tracking discussions regarding approvals on major projects.

Websites:
Department of State and Regional Development
www.business.vic.gov.au

Investor’s Guide to Victoria
www.invest.vic.gov.au

Victoria Tourism
www.tourism.vic.gov.au