Daily Archives: October 20, 2019

Although offshore wind power projects have been operating in Europe since the early 1990's, the U.S. has been slow to embrace the idea of massive turbines in its oceans. The situation has changed rapidly over the past few years, however, and states like Massachusetts, Virginia, and New York have put sizable mandates in place to speed up construction of the projects.

Avangrid (NYSE:AGR), Dominion Energy (NYSE:D), and Equinor (NYSE:EQNR) are companies that have been partnering with states to build offshore wind farms and operate them for decades, potentially lining up a new revenue source. The companies will be among the first to own offshore wind farms in the US if the projects proceed as planned. The extent of the profit margin for the projects remain uncertain, however, as the all-in costs to build offshore wind projects remain higher than their land-based counterparts.

Image source: Getty Images.

Avangrid is an electric and gas utility and renewables developer with $32 billion in assets and operations in 24 U.S. states. The company has shown an enthusiasm for growing its renewables presence on a big scale and last year was part of the consortium known as Vineyard Wind that won a contract with the Massachusetts Department of Public Utilities.

The company is partnered with Copenhagen Infrastructure Partners to build an 800 MW offshore wind project in two 400 MW phases that will earn revenue from the state for a period of 20 years. Despite the infancy of the market, securing the contract in Massachusetts enabled the company to get a foothold in the US and potentially rack up a portfolio of contracts in future bidding. Vineyard Wind is also bidding for a second project in Massachusetts and a project in Connecticut and is pursuing projects in North Carolina, New York, and California, according to a June Offshore Wind Day presentation from Avangrid.

The timing will also make it possible for Avangid and its partner to reap the benefits of at least a portion of a prized 30% offshore wind investment tax credit (ITC) which will begin being phased out at the end of this year. Avangrid Chief Executive Officer James P. Torgerson said on the company's Q2 earnings conference call he expects the Vineyard Wind project in Massachusetts to be able to capture 24% of the ITC as it makes its US$2.8bn investment.

Dominion Energy (D) is a gas, electric, and renewable energy company that has made a strong commitment to offshore wind development despite its massive portfolio of other assets, including more than 2.6 GW of clean energy in 10 states. The company operates in 18 states and serves nearly 7.5 million utility customers.

Dominion is also developing a small pilot project in Virginia that it said will inform its development of large-scale commercial wind. Dominion is looking to install a total of 2.6 GW of wind turbines in its leased area and plans to use the output to serve its own customers.

Norway's Equinor is a petroleum and wind energy company with operations in 36 countries. The company owns four offshore wind farms in the United Kingdom and Germany and built the world's first floating offshore wind farm off the coast of Scotland in 2017.

In July, Equinor won the bid to develop the Empire Wind project in offshore New York, an 816 MW wind farm. Commercial terms for Empire Wind are being discussed and Equinor expects to ultimately negotiate a long-term contract with the New York State Energy Research and Development Authority (NYSERDA).

Equinor said on its website it sees the U.S. as a "key emerging market for offshore wind, with huge potential along both the east and west coasts, from Massachusetts to California and Hawaii." However, when an analyst on the company's Q2 conference call asked what internal rate of return the company was expecting from the Empire project Chief Financial Officer Lars Bacher said it is "too early in the stage of that development to say something about the returns."

AGR data by YCharts

Avangrid, Dominion, and Equinor are taking part in solid state-supported initiatives to build offshore wind power and they are all in a position to take care of a generous investment tax credit. But in light of the companies' significant overall asset holdings and cost issues associated with these projects it is too soon to tell if offshore wind will boost profits in a meaningful way. A longer-term investor would be wise to keep an eye on these three companies as US offshore wind projects begin operating and generating revenue over the next few years.

Read more:

3 Companies Banking on U.S. Offshore Wind - Motley Fool

By using an offshore bank, residents gain access to the highly personalised world of banking, often at a surprisingly low entry point Image Credit: Shutterstock

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This content comes from Reach by Gulf News, which is the branded content team of GN Media.

Read more from the original source:

7 reasons to get an offshore account with Citibank UAE | Banking - Gulf News

BLOCK ISLAND, R.I. The winds are blowing fair for Americas wind power industry, making it one of the fastest-growing U.S. energy sources.

Land-based turbines are rising by the thousands across America, from the remote Texas plains to farm towns of Iowa. And the U.S. wind boom now is expanding offshore, with big corporations planning $70 billion in investment for the countrys first utility-scale offshore wind farms.

We have been blessed to have it, says Polly McMahon, a 13th-generation resident of Block Island, where a pioneering offshore wind farm replaced the islands dirty and erratic diesel-fired power plant in 2016. I hope other people are blessed too.

But theres an issue. And its a big one. President Donald Trump hates wind turbines.

Hes called them disgusting and ugly and stupid, denouncing them in hundreds of anti-wind tweets and public comments dating back more than a decade, when he tried and failed to block a wind farm near his Scottish golf course.

And those turbine blades. They say the noise causes cancer, Trump told a Republican crowd last spring, in a claim immediately rejected by the American Cancer Society.

Now, wind industry leaders and supporters fear that the federal government, under Trump, may be pulling back from what had been years of encouragement for climate-friendly wind.

The Interior Department surprised and alarmed wind industry supporters in August, when the agency unexpectedly announced it was withholding approval for the countrys first utility-scale offshore wind project, a $2.8 billion complex of 84 giant turbines. Slated for building 15 miles (24 kilometers) off Marthas Vineyard, Vineyard Wind has a brisk 2022 target for starting operations. Its Danish-Spanish partners already have contracts to supply Massachusetts electric utilities.

Investors backing more than a dozen other big wind farms are lined up to follow Vineyard Wind with offshore wind projects of their own. Shells renewable-energy offshoot is among the businesses ponying up for federal leases, at bids of more than $100 million, for offshore wind farm sites.

The Interior Department cited the surge in corporate interest for offshore wind projects in saying it wanted more study before moving forward. It directed Vineyard Wind to research the overall impact of the East Coasts planned wind boom.

Interior Department spokesman Nicholas Goodwin said offshore energy remains an important component in the Trump administrations energy strategy. But the strategy includes ensuring activities are safe and environmentally responsible, Goodwin said in a statement.

Wind power now provides a third or more of the electricity generated in some Southwest and Midwest states. And New York, New Jersey and other Eastern states already are joining Massachusetts in planning for wind-generated electricity.

Along with the U.S. shale oil boom, the rise in wind and solar is helping cushion oil supply shocks like the recent attack on Saudi oil facilities.

But the Interior Departments pause on the Vineyard Wind project sent a chill through many of the backers of the offshore wind boom. Critics contrast it with the Republican administrations moves to open up offshore and Arctic areas to oil and gas development, despite strong environmental concerns.

That I think is sort of a new bar, for the federal government to require developers to assess the impact of not just their projects but everyones, said Stephanie McClellan, a researcher and director of the Special Initiative on Offshore Wind at the University of Delaware. That worries everybody.

Thomas Brostrom, head of U.S. operations for Denmarks global offshore wind giant Orsted and operator of the pioneering Block Island wind farm, said that the last three, four years have seen unbelievable, explosive growth, much more than we could have really hoped for, in the U.S., compared to Europes already established wind power industry.

Given all the projects in development, we hope that this is a speed bump, and certainly not a roadblock, Brostrom said.

Wind power and the public perception of it have changed since Americas first proposed big offshore wind project, Cape Wind off Cape Cod, died an agonizing 16-year death. Koch and Kennedy families alike, along with other coastal residents, reviled Cape Wind as a potential bird-killing eyesore in their ocean views.

But technological advances since then mean wind turbines can rise much farther offshore, mostly out of sight, and produce energy more efficiently and competitively. Climate change and the damage it will do these same coastal communities also has many looking at wind differently now.

Federal fisheries officials have been among the main bloc calling for more study, saying they need to know more about the impacts on ocean life. Some fishing groups still fear their nets will tangle in the massive turbines, although Vineyard Winds offer to pay millions of dollars to offset any harm to commercial fishing won the support of others. At least one Cape Cod town council also withheld support.

A rally for Vineyard Wind after the Interior Department announced its pause drew local Chamber of Commerce leaders and many other prominent locals. Massachusetts Republican governor, Charlie Baker, has been traveling to Washington and calling Interior Secretary David Bernhardt to try to win his support.

At Cape Cod Community College in West Barnstable, instructor Chris Powickis Offshore Wind 101 classes and workshop have drawn nuclear and marina workers, engineers, young people and others. People are hoping wind will provide the kind of good-paying professions and trades they need to afford to stay here, Powicki says.

Cape Cod has always been at the end of the energy supply line, or at least ever since we lost our dominance with the whale oil industry after the 19th century, the community college instructor said. So this is an opportunity for Cape Cod to generate its own energy.

On land, the wind boom already is well established. By next year, 9% of the countrys electricity is expected to come from wind power, according to the U.S. Energy Information Administration. The wind industry already claims 114,000 jobs, more than twice the number of jobs remaining in U.S. coal mining, which is losing out in competition against cleaner, cheaper energy sources despite the Trump administrations backing of coal.

The Trump animosity to wind power has gone beyond words in some states, especially in Ohio. A Trump campaign official was active this summer in winning a state ratepayer subsidy for coal and nuclear that also led to cutting state incentives for wind and solar.

But despite the steady gales of condemnation from the countrys wind-hater in chief, wind is booming most strongly in states that voted for Trump.

Then-Texas Gov. Rick Perry, now Trumps energy secretary, pushed his state to one of the current top four wind power states, along with Oklahoma, Kansas and Iowa.

In Iowa, home to nearly 4,700 turbines that provided a third of the states electricity last year, winds popularity is such that Republican Sen. Chuck Grassley had a drone film him as he sat, grinning, atop one of the countrys biggest wind turbines.

Grassley had no patience for Trumps April claim that wind turbines like Iowas beloved ones could cause cancer.

Idiotic, Grassley said then.

On the East Coast, many developers and supporters of offshore wind politely demur when asked about Trumps wind-hating tweets and comments.

But not on Block Island.

Were very fortunate that we got it. Very fortunate. Its helped us, McMahon, the retiree on Block Island, said of wind energy. And dont worry about the president. Hes not a nice man.

More:

Presidents windmill hatred is a worry for booming industry - FOX61 Hartford

Almost three-quarters of companies who have been given major government contracts have operations based in tax havens, according to a new report.

Value Added, published on Sunday by the thinktank Demos, reveals that 25 of the governments 34 strategic suppliers organisations that receive 100m or more in revenue from the government operate in offshore centres.

According to estimates, they account for about a fifth of total central government procurement spend. Of these, 19 had operations in jurisdictions included on the EUs blacklist or greylist of countries that are considered to be non-compliant with EU international standards for good tax behaviour, according to the report.

The Labour MP and former chair of the public accounts committee, Margaret Hodge, said it was perverse that the government continues to pay significant sums of taxpayer money to big corporations that practise tax avoidance on an alarming scale.

There are claims that aggressive use of tax havens can distort competition.

The Labour peer, Lord Haskel, added: For too long large international tech companies have failed to pay their fair share of tax while being rewarded with government contracts, leaving British companies at a competitive disadvantage.

The Demos report states: Large multinational companies, for example, continue to squeeze their tax contributions ever lower: the OECD estimates that US$100$240bn (78bn-186bn) is lost globally in revenue each year from base erosion and profit shifting by multinational companies.

Public procurement is the best opportunity the government has to demonstrate what a good British business looks like

Procurement is the UK governments largest expenditure, valued at 284bn. Of the 25 organisations with links to tax havens, 20 benefited from contracts worth a combined 41bn awarded between 2011 and 2017.

Government procurement could be an incredible force for good in the UK, beyond the public sector and in the economy more broadly, said Rose Lasko-Skinner, researcher at Demos and co-author of Value Added.

Public procurement is pretty much the best opportunity the government has to demonstrate what a good British business looks like, and this purchasing power should not be underestimated, added Lasko-Skinner.

The government has taken steps to improve the way it manages contracts with key suppliers.

The report states that earlier this year, in response to the collapse of public-sector contractor Carillion and to fundamentally flawed probation contracts being brought back in-house, the Cabinet Office published the Outsourcing Playbook. Its aim was to improve and strengthen the way government procures, and thereby reduce the risk of similar mishaps in the future.

Demos said that there was a need for new measures including minimum standards for public procurement to include criteria relating to a bidders exchequer contribution.

The thinktank has also called for the National Audit Office to conduct an annual report on central government procurement transparency.

This would include a league table ranking of departments, with the bottom three departments compelled to make a statement to parliament.

View post:

UK government pays millions to firms that use tax havens - The Guardian

WIND turbines for Scotland's newest and largest offshore wind farm are to be built by MHI Vestas a major Isle of Wight employer.

MHI Vestas has entered into a preferred supplier agreement with Seagreen Wind Energy Limited to supply and service up to 114 wind turbines for the wind farm.

SSE Renewables is building Seagreen Offshore Wind Farm, off the coast of Fife, which will be one of the most significant construction projects undertaken in Scotland.

John Hill, Seagreen project director at SSE Renewables, said: Were really pleased to welcome MHI Vestas to the Seagreen project as our preferred turbine supplier and look forward to working with them to harness the power of North Sea wind with their proven offshore turbine technology.

"As the project progresses towards a final investment decision, SSE Renewables and MHI Vestas will work together to continue to engage with the Scottish and UK supply chain to maximise Scottish and UK content.

Philippe Kavafyan, chief executive of MHI Vestas Offshore, said: We are proud to enter into a preferred supplier agreement with Seagreen for the supply of our proven wind turbine technology to Scotlands largest offshore wind farm.

Scotland is a burgeoning centre for offshore wind and we are keen to work closely with both the Scottish and UK supply chain to create real value for the local communities as this project becomes a reality.

"We see the project as a major step forward for the offshore wind industry in the UK, and Scotland in particular.

"This will be our fourth project in Scotland.

The site will provide around 5,000GWh annually of clean, low carbon renewable energy for around one million homes and saving around two million tonnes of carbon dioxide emissions annually.

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Link:

Wind turbines for Scotland's largest offshore wind farm to be built by MHI Vestas - Isle of Wight County Press

Tropical Storm Nestor is bearing down on the Gulf Coast of Florida this weekend.

Tropical Storm warnings have been posted in this area; storm surge flooding, rainfall flooding, and possible damage from tropical storm force winds are the primary threats from this storm. For more information on the approach to the Gulf Coast, you can watch the above video from affiliate WFLA:

Once it makes landfall and moves further inland, it will likely eventually lose its status as a tropical storm. However, it will still bring heavy rain and wind to parts of Georgia and potentially the Carolinas.

We will then have to keep a close eye on this storm as it moves back out over the Atlantic. At this point, most of the data suggests that the core of the storm will stay offshore, but its possible we get clipped by the fringe late Sunday.

Under this scenario, we might get a few showers Sunday evening but the impact would be minimal. However, a track further north would bring the the potential of heavy rain, stronger winds, and dangerous surf as well (there could be some high surf even if the storm does not get that close). Regardless of the track, its likely that the storm will no longer be a tropical storm if it gets close to New England. We will monitor this carefully this weekend.

See the article here:

Nestor Heading To Gulf Coast, Then Maybe Offshore From New England By End of Weekend - WPRI.com

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LAKE Macquarie is set to be a buzz with heart-thumping action this weekend when Australia's most powerful boats thunder across the water for two days of racing. In what could be the Lake Macquarie's answer to Newcastle's Supercars weekend, round three of the the 2019 Offshore Superboat Championships will see super-sleek vessels reach speeds of up to 200km/h as they negotiate a 7km course around the lake. The boat races will start from Marmong Point Marina and traverse a course that passes the west, east and north sides of the lake. This year's races will see the return of crowd-favourite race teams, including Maritimo Australia, and Simrad SUV. Simrad SUV will be piloted for the first time by Lake Macquarie boating identity and Marmong Point Marina owner Les Binkin. Lake Macquarie mayor Kay Fraser, who took a ride in one the superboats on Thursday, said the annual event had become a staple of the city's events calendar. "Community events like the Superboat Championships bring so much vibrancy to our city," Cr Fraser said. "They activate our lake foreshore and bring our community and visitors together to celebrate what we love about Lake Mac." The superboats will race at 1.20pm on Saturday and at 11am and 1pm on Sunday. The action will continue throughout the weekend with junior boat categories racing the course on both days. There will also be jet-ski racing between 10am and 3pm on both days from Lions Park at Eleebana. Off the water, there will be a range of activities. At Warners Bay, spectators can enjoy markets and pop-up licensed bars, open from 10am to 3pm both days. A vintage car display will also take place at the southern end of the foreshore on Saturday, along with fee family water sports at Marmong Point Sailing Club and a food and wine festival at Speers Point Park from noon to 8pm. The best Superboats viewing spots are considered to be Eleebana, Marmong Point and Warners Bay foreshore. Lake Macquarie council's manager arts, culture and tourism, Jacqui Hemsley, said other highlights included a show and shine contest at Speers Point Park on Sunday, and aerobatic displays over the lake at 11.45am on Saturday, and 9.45am and 11.45am on Sunday.

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LAKE Macquarie is set to be a buzz with heart-thumping action this weekend when Australia's most powerful boats thunder across the water for two days of racing.

In what could be the Lake Macquarie's answer to Newcastle's Supercars weekend, round three of the the 2019 Offshore Superboat Championships will see super-sleek vessels reach speeds of up to 200km/h as they negotiate a 7km course around the lake.

The boat races will start from Marmong Point Marina and traverse a course that passes the west, east and north sides of the lake.

This year's races will see the return of crowd-favourite race teams, including Maritimo Australia, and Simrad SUV. Simrad SUV will be piloted for the first time by Lake Macquarie boating identity and Marmong Point Marina owner Les Binkin.

Lake Macquarie mayor Kay Fraser, who took a ride in one the superboats on Thursday, said the annual event had become a staple of the city's events calendar.

"Community events like the Superboat Championships bring so much vibrancy to our city," Cr Fraser said.

Community events like the Superboat Championships bring so much vibrancy to our city.

"They activate our lake foreshore and bring our community and visitors together to celebrate what we love about Lake Mac."

The superboats will race at 1.20pm on Saturday and at 11am and 1pm on Sunday.

The action will continue throughout the weekend with junior boat categories racing the course on both days. There will also be jet-ski racing between 10am and 3pm on both days from Lions Park at Eleebana.

Off the water, there will be a range of activities. At Warners Bay, spectators can enjoy markets and pop-up licensed bars, open from 10am to 3pm both days. A vintage car display will also take place at the southern end of the foreshore on Saturday, along with fee family water sports at Marmong Point Sailing Club and a food and wine festival at Speers Point Park from noon to 8pm.

The best Superboats viewing spots are considered to be Eleebana, Marmong Point and Warners Bay foreshore.

Lake Macquarie council's manager arts, culture and tourism, Jacqui Hemsley, said other highlights included a show and shine contest at Speers Point Park on Sunday, and aerobatic displays over the lake at 11.45am on Saturday, and 9.45am and 11.45am on Sunday.

Read the original post:

Lake Macquarie to host round three of 2019 Offshore Superboat Championships - Newcastle Herald

FORT MYERS BEACH, Fla The inaugural Roar Offshore National Boating Race brought success to many businesses in the area this weekend.

The racing organization has decided to extend their contract with fort Myers beach for the next 20 years!

The event attracted people from all over the world to Fort Myers Beach, during a time of year that is typically slow for local hotels and restaurants. The owner of The Dog House says he sold tons of hot dogs to fans.

"We were so busy and I didnt even really have time to look up, said Adam Clark.

The owner of Shucker's at the Gulfshore and The Cottage Bar told Fox 4 that there was an astounding number of customers this past weekend.

We did have a record day last saturday, said Carlos Morales.

The event's organizers were even surprised by the turn out, president of Roar Offshore says

A first year event of this magnitude went better than expected. The crowds were phenomenal, the local sponsors and businesses were packed, everybody had a great time, said Hill.

Roar Offshore originally signed a 5 year contact to hold the races on Fort Myers Beach, but after this weekend they decided to re-visit the contract with the Offshore Boating Association (OPI).

Yesterday we sat down with the president of OPI, and he said I want you guys to have this race forever, said Tim Hill.

The contract now calls for the races to be held on the island for the next 20 years.

People in the community tell Fox 4 that after this weekend, they are looking forward to the races year after year!

Continue reading here:

Protecting Paradise Roar Offshore signs 20 year contract with Fort Myers Beach Miana Massey 11:50 - Fox 4

A development consortium made up WindPower Korea, EDP Renewables (EDPR) and Aker Solutions has been formed to build a 500MW floating wind project off the coast of South Korean, moving forward ambitious plans by the south-east Asia nation for a giant offshore power complex off the industrial port city of Ulsan.

The group, one of four that signed memoranda of understanding with the citys authorities in January, will use Principle Powers WindFloat platforms for the project, which will be developed by special purpose company Korea Floating Wind Power (KFWind).

The Ulsan area is well-suited for commercialising floating wind, due to the combination of industry-leading shipyards, maritime expertise and port facilities in the region, the consortium said in a statement. The consortium foresees that a potential project will contribute with significant positive economic and environmental benefits to the local community.

The consortium has been committed from the beginning to working hand-in-hand with the local fisheries associations and stakeholders to ensure that projects are well-sited and developed responsibly.

The floating wind farm, located a site some 50km (31 miles) offshore, will come under the umbrella of a joint venture between EDPR and French developer Engie announced in May.

Green Giraffe, a Paris-headquartered specialist renewables consultancy, advised KFWind on the plan. The project partners did not disclose the value of the transactions.

From a standing start, South Korea aims to develop 13GW of offshore wind plant off its coast by 2030 to drive toward a target of having at least 30% renewable energy in its national mix by 2040.

Go here to read the rest:

Offshore heavyweights launch giant floating wind project off Korea - Recharge

In the first part of this series, we discussed the emergence of a new generation of Offshore Growers. So why have the Offshore Growers succeeded now when the past is littered with the failed expansion moves of Australian companies? What makes them different? What changed?

Based on our exclusive interviews with the CEOs, chairpersons, directorsand founders of leading Offshore Growers, seven key factors emergedas being decisive in their ability to win in the world.

Australian companies have benefited from the globalisation and greater integration of the worlds economy.

In recent decades, Australia and many other countries liberalised trade by removing or cutting tariffs taxes levied on imports -- and other rules that restricted trade.

Australia has become more integrated with the world economy and has boosted trade. Merchandise trade has risen from 26% of nominal GDP in 1986 to 31% in 2016.

Australia has 11 free trade agreements: China, Japan, Republic of Korea, New Zealand, Singapore, Thailand, US, Chile, the Association of South East Asian Nations (ASEAN) (with New Zealand), Malaysia, and Canada and Mexico (1).

That environment has made it significantly easier and cheaper for Australian companies to do business internationally.

Gains from trade liberalisation and tariff reductions are obviously threatened by the emergence of trade wars, particularly the US-China trade war launched by US President Donald Trump in early 2018.

But, despite that, most of the gains of liberalisation will be protected and continue to facilitate international trade and company expansion.

One of the major factors underpinning the successful international growth of a new generation of Australian companies is technology.

Technology enables businesses to build scalable platforms across borders, and at the same time drives better consumer engagement and operational efficiencies. Technology is also delivering Australian management greater control, connection and collaboration.

The key globalisation technologies include

Technology is making successful global expansion from Australia possible because businesses can centrally control their global activities from Australia.

Lovisa, which launched in April 2010, now operates in 15 countries. Fallscheer remembers in the early 2000s doing global video calls. The sound didnt work and the frames constantly froze. Now it is so easy to communicate, he says.

In the past if a company wanted to build a global brand, they would need to spend huge sums on advertising and support those efforts with a large local sales force.

But the Offshore Grower is tapping into the huge global audiences that social media offers.

The explosive growth of social media networks has made it easier for companies to leverage the viral network effects of platforms such as Facebook, Twitter and Instagram to drive brand recognition.

A 20-year-old girl is inspired by the same global social media that other girls are around the world, Lovisas Fallscheer says. It is much easier to create a presence using social media and other forms of marketing. Once upon a time that was hard.

As at July 2019, the world had 4.3 billion internet users; some 3.5 billion are active social media users. That represents 46% of the worlds population (2).

Many senior directors have fantastic experience and add significant value. But many have been burnt by the spectre of failed global expansion by Australian corporates like AMP and NAB. Its not difficult to see them counselling against going offshore.

The Offshore Growers say a key to their success has been younger, more dynamic boards, with directors who boast international experience and are prepared to back it. They have the confidence to take on the world and win.

In the past, Australian companies expanded overseas with little competitive edge. It was expansion for expansions sake.

But the new generation of Offshore Grower has a laser-like focus on their value proposition and how it is going to solve the needs of their clients, especially overseas.

A2s Babidge was very much of the belief his product, by removing the a1 protein, was going to benefit those who were milk intolerant.

One of the biggest strategic shifts Offshore Growers have made is to expand offshore not through acquisitions, but organic growth: growing their own businesses in international markets.

They have learnt from the mistakes of the past.

Most of the overseas mis-steps have been acquisitions rather than organic, a2s Babidge says.

Former Afterpay executive director David Hancock says the past model was more buy than build. For Offshore Growers it is now build rather than buy.

Kay says that organic growth is a measured way of going global.

Lovisas Fallscheer says they key is to move in slowly and allow yourself to learn from your mistakes. He says the biggest mistake going global is letting ego get in the way.

Its not about flagship stores, he says. You cant take the eye off the end goal profitability.One of the reasons Offshore Growers tend to favour organic growth is they recognise the value of their products and services. A2s Babidge says the company believed it was unique so wanted to grow organically rather than being distracted with an acquisition.

Afterpay and Nearmaps Rosenberg says that Australian companies often have clients in the Australian market who have an international footprint. Those clients often request the Australian company to expand offshore to service their other locations. This can help facilitate global expansion in a less risky manner given these clients can help justify the (often considerable) investment required for overseas expansion.

Finally, rather than making all-out bets on global expansion, the Offshore Growers have adopted a test-and- learn strategy that typically follows three main steps.

Test

Firstly, they test their competitive advantage in the small open economies of Australia and New Zealand. Australia is a good test market, says IMF Bentham and City Chics Michael Kay. It is easy to get around and communicate.

Learn

Secondly, the Offshore Growers then pivot their businesses after learning from their mistakes in Australia. It is much easier to make mistakes and learn from them in Australia than in the US or Europe.

Expand

And thirdly, after testing and refining their model at home, the Offshore Growers then shift that model overseas.

More from this series

In the first part of our series, we discussed the emergence of a new generation of Offshore Growers.

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(1) Free trade agreements (FTAs), Australian Government Department of Agriculture.

(2) Global Digital Statshot, We Are Social/Hootsuite, published July 17, 2019

Link:

The 7 key factors driving the success of Offshore Growers - Livewire Markets