G’day Ainsleym, No quite to the contrary, to compete...

G’day Ainsleym,

No quite to the contrary, to compete internationally a low AUD will be absolutely essential, not dissimilar to the car industry, the dollar goes down, export potential goes up.

The only difference being that the car industry has already abandoned this strategy, for a couple of very valid reasons (in my opinion)

1.    They may not believe that the AUD will drop sufficiently low enough to compete internationally
2.    It would be difficult to make the case in terms of efficiency gains to compete against its overseas equivalents
3.    Other Countries are just plain lower cost in mainstream manufacturing

I think all of these points would be logical conclusions, if you consider what can be brought to the competitive table in creating or adding value beyond what can be achieved elsewhere, very little!

Now conversely, the effect of a high AUD dollar in the past has the opposite effect in that it is quite economical to import fabricated steel components (hence bolstering profitability), as constantly reported on the many large scale infrastructure projects of structures coming from overseas.

So in essence, it would seem that the strategy of Korvest pursuing International opportunities is to believe that they can manufacture the same low tech ‘bits of metal’ in a manner which will enable them to compete against the very manufacturers in low cost Countries already servicing those regions.

They may win a handful of projects through persistence and heavy discounting, although I think the biggest success of this strategy will at a personal level in the way of frequent flyer points earned. Ie from the heavy travelling, someone may be lucky enough to earn a ‘free’ around the world trip, economy class! woohoo!

Anyway, what the hell do I know!