Australia's Largest State

It should be no surprise that Western Australia is so attractive for international tourists and investors. Apart from near perfect weather for most of the year, the state is currently enjoying unprecedented high growth from diverse industrial development.

A major catalyst for industrial growth is the state’s buoyant resources sector, responsible for attracting more than half of all new investment capital for Australia. This trend is set to continue as world energy prices reach a 13-year high, and the demand for key commodities continues.

Japan is Western Australia’s largest export destination, receiving 25% of the state’s total merchandise exports, heavily concentrated on four products – iron ore, petroleum, alumina and liquefied natural gas (LNG). Gold, nickel, live crustaceans, pearls and salt are other significant export items.

Growing food and beverage sales to Japan – including beef, lobster and fine wine – benefit from the state’s internationally-acknowledged environmental awareness and ‘clean and green’ reputation.

This reputation, together with Western Australia’s status as Australia’s largest state (bigger than Japan, Texas, the UK and New Zealand combined) has also made it a popular emerging destination for Japanese tourists.

Resources

The biggest area of growth is likely to come from gas projects, with around A$15bn worth of projects on the horizon. China has already signed a major long-term LNG supply agreement with partners in the A$11bn Gorgon project, while the United States is also keen to take supplies of LNG from Western Australia. Completion of the North West Shelf joint venture’s LNG Train-4, and the possible commitment of a fifth LNG processing train, will lift total spending on gas projects in the state’s North West to A$15bn.

Another strong sector is Western Australia’s iron industry, with projects valued at around A$6.5bn either committed or on the drawing board. Japan is the state’s major overseas market for iron ore.

Alumina refinery expansion and optimisation are under way or planned in the state’s south west, while expansion of the Telfer gold mine in the Pilbara region is almost complete. Beyond these are numerous sundry resource projects worth more than A$10bn, some of which are subject to final feasibility studies, while others involving desktop studies remain confidential at this stage.

Major research and development initiatives add to the resources sector in Western Australia. One example is a major oil and gas research alliance between CSIRO, ChevronTexaco and two Western Australian universities (UWA and Curtin), worth A$20m.

Non-resources industry activities

While the resources sector provides a firm foundation, other industries add variety to a vibrant investment landscape. Shipbuilding, research and development, information technology and communications offer considerable opportunities now and in the future.

The potential for shipbuilding in Western Australia is enormous, with numerous large-scale projects currently under way or being assessed. Much of it will be based on construction and upgrade work either committed or planned by the Australian Navy at the recently opened A$200m Australian Marine Complex, located south of Fremantle.

Technology strengths

Western Australian companies have enjoyed global success in ICT, with major strengths in mining technology and software, smart cards, mapping and design, radio and broadband communications, and other fields.

Western Australia’s Edith Cowan University was recently awarded A$1.9m under the Centre for Excellence Program to further develop a world-class research base for microphotonics in Western Australia.

Recent research suggests that an opportunity exists for the creation of a A$55m wireless cluster in Perth, centred around communications giant Motorola’s recent technology development alliance with the University of Western Australia.

Global computer leader IBM is also looking to expand its Australian Programming Centre, with Perth being viewed as a potential location. This could spark as much as A$40m in investment, creating 84 new jobs.

In 2004 IBM and joint venture partner ISA established a high-powered computer larger than any in Australia, at WA Technology Park. The computer will target oil and gas companies, plus the small-to-medium businesses that from time to time are seeking high-power computing for special projects. The facility could involve a total investment of around A$20m, using funds from the joint venturers plus federal and state governments.

Another investment possibility is a A$200m low frequency array (LOFAR) in the Murchison region.

Biotechnology

Key biotech competencies in Western Australia include agricultural biotechnology, environmental biotechnology, bio-leaching and hydrometallurgical processing and bioinformatics. These are backed by highly skilled people at Western Australia’s five universities and numerous technical educational institutions.

Examples of current projects include the production of genetically modified mice and rats for the global market; clinical cell culture for skin replacement products (>> more); surgical retractor systems for pelvic, hip, urology and gastric bypass surgery; and enhanced products for molecular medicine and biotechnology markets.

Rounding out the diverse range of non-resource related industries in Western Australia is an investment of A$68m in 2003/4 in timber industry assistance projects.

>> www.doir.wa.gov.au