'Virtual' company shows virtues of the electronic way

The Australian export company AEXCO is made up of 15 hay exporters throughout South Australia, Victoria, Western Australia and New South Wales. These exporters comprise about 95 per cent of Australian hay exporters.

AExCo IS A 'VIRTUAL' COMPANY FORMED in 2000. Made up originally of eight hay exporters, now 15, it was set up by the South Australian Research and Development Institute (SARDI) to licence new hay oat seed varieties.

In developing a model to commercialise oat seed SARDI wanted to explore eBusiness opportunities for providing an information flow-back to growers on customers' hay quality requirements - particularly in Japan, Taiwan and Korea where oats is a high-value fodder.

eBusiness technologies such as. SMS messaging (short messages sent to and from mobile phones) and email are used to move information between participants as well as arranging conventional meetings.

AExCo has a memorandum of understanding with the Australian Field Crops Association (AFCA) to handle certified seed from SARDI. AFCA on-sells quality-assured seed to grower members in four states.

The members multiply the seed and sell it to hay producers, who in turn sell the hay to AExCo exporters.

It means growers are producing seed varieties to meet specific export requirements, under an arrangement that ensures all parties share in the value adding rewards.

AExCo is another example of how a value chain can be constructed. All the participants collect royalties at appropriate points in the supply line. The system is pure eBusiness and it has helped AExCo achieve a competitive advantage.