China still CFOs’ number one target
2012-10-29 11:34:52
Australian finance chiefs are 12 per cent less likely than the rest of the world to see overseas expansion as a key driver for revenue growth, according to a study on the attitudes of chief financial officers across 14 countries on expansion into international markets.
The annual study sponsored by accounting firm BDO International and released on October 29, surveyed more than 1000 chief financial officers globally, 100 of them from Australia.
Australian finance chiefs were fairly optimistic about international expansion, though not as optimistic as their international peers.
“This is probably in part due to the fact that CFOs in other countries with economies which aren’t as strong as Australia’s will be more inclined to look offshore for growth opportunities,” says BDO (Australia) executive director international business Cameron MacMillan.
Twenty four per cent of Australian CFOs saw increased regulation in other jurisdictions, particularly the US, as the biggest inhibiting factor to overseas expansion.
China, the US and Indonesia were the top three international targets for Australian CFOs.
Those CFOs considering entering, or expanding their presence, in the Australian market were most commonly from India, South Africa, Britain or China. None of the global respondents were planning to exit Australia.
“Finding the right local management and managing fluctuations in the currency were the biggest risks those CFOs saw in Australia,” says MacMillan. “That’s a big change from last year when the time and cost of getting set up due to foreign investment restrictions were seen as the biggest barrier.”
Twenty five per cent of respondents globally felt that conducting business overseas had become more difficult over the past three years.
Internationally, 69 per cent of CFO respondents pointed to China as their top target. “It’s all about market size and cheap labour,” says MacMillan.
France and Japan dropped in their popularity as targets for international expansion, “due to their economies but also probably due to issues of language and culture”, says MacMIllan.
“The message from finance directors working all over the world was that concentrating on getting good local management in place and being sure to have an accurate reading on local rules and regulations were the most important factors in successful international expansion,” says MacMillan.