Janet Hogan, centre, is expanding her wedding business Villa Botanica to Bali.The high cost of doing business in Australia has prompted wedding planner and venue business Villa Botanica to expand to Indonesia.
The company is among a number of entrepreneurs prioritising international expansion over domestic growth due to high labour costs in Australia, overbearing taxes and limited market opportunities.
The company’s director, Janet Hogan, said its Airlie Beach venue in north Queensland’s Whitsundays had reached capacity since opening five years ago. The Bali venue will allow the company to tap into a new market as well as the growing number of Westerners marrying abroad.
The company will make a higher margin from functions in Bali due to lower labour costs, no goods and services tax, and the ability to do four times as many functions. Speaking from Ubud where she is launching new venue Botanica Bali to the wedding industry this month, Ms Hogan said it already had three bookings, compared to its Australian venue for which the shortest lead time was about nine months.
“We don’t make a lot from each wedding, but with a high turnover model it makes a good business,” Ms Hogan said. “With our current staff, we can still service the additional weddings so we’re not increasing our overheads.”
The company aims to host up to 400 weddings in the next two years in Bali and is looking for a second overseas venue.
Queensland health supplement manufacturer Slim Nation is also investing in international expansion, launching in China, where it can get higher margins on its powder supplement and shake range.
This offsets the higher cost of manufacturing in Australia. Slim Nation director Aaron Zamykal hopes the move will boost sales by 600 per cent, up from about $10 million in the 2012-13 financial year.
He said maintaining manufacturing in Australia was critical to the reputation of the company and quality of the products. “The Chinese don’t want to buy Chinese products. They want high-quality Australian products and they will pay a premium for it.”
Villa Botanica can host the same calibre function for up to 60 per cent less cost in Bali. Its Airlie Beach venue costs from $25,000 to $50,000, but two-thirds of the 2500 inquiries it gets each year are couples with budgets between $10,000 and $25,000.
Margins are slim in the wedding business. Villa Botanica’s costs include 17 full-time staff and around 40 suppliers. Moving overseas won’t alleviate that but it might increase the volume of functions.
Villa Botanica is restricted to a maximum of 110 weddings a year, or three a week, at Airlie Beach, and is closed for the wet season between January and March. In Bali it can offer up to 160 a year, Ms Hogan said. Its earnings come from a subsidised service fee under an agreement with The Royal Pita Maha.
Mr Zamykal plans to take Slim Nation products to Thailand and Malaysia. The group is also rolling out its liquid meal replacement product Meal in a Bottle to supermarkets in Australia and to vending machines in the Brisbane hospital network through a partnership with a PA Research Foundation.
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