Cygnett: A tough case

Cygnett

Download PDFView Website

Background

Cygnett is an Australian business that has grown to become one of the world’s leading digital accessory designers and manufacturers. Their humble beginnings in 2003 have seen the founders emerge through the downturn of the GFC to produce a range that includes covers, speakers, headphones and bags providing protection, fashion and function. Cygnett products can be found in 50 countries and more than 55,000 retail outlets. Cygnett have utilised the funding opportunities available through EMDG to expand their international sales through representative offices and targeted marketing campaigns.

Challenge

Cygnett goods are manufactured overseas and traditionally this has meant that they do not meet EMDG eligibility criteria. The companies’ international expansion plans involved setting up a UK office which is a costly activity. The Directors had previously been involved with another family business that had applied for EMDG funding and sought Export Solutions assistance to determine their eligibility.

Solution

Although Cygnett manufacture their products overseas, Export Solutions worked with them to prepare a submission for Austrade outlining the benefits that their business brings to Australia.  Austrade were impressed by their application which demonstrated the level of development activities and overall management in Australia.  They were approved for EMDG funding and have continued to maintain that annual approval for 6 years.

Quote from the client

“The EMDG program has over the last 6 years provided critical funding for major International Development projects. With offices and staff now on 4 continents and distribution throughout some 50 plus countries, Cygnett is well placed for ongoing growth. Cygnett is proud of its international standing and achievements and very appreciative of the wonderful support provided by the EMDG program.”
Gary Newman Chief Executive Officer

How it works

Export Solutions worked with the accounting and management team to prepare a submission to Austrade. Cygnett staff were provided with an Export Solutions EMDG Kit to assist with planning and gathering support documentation for their grant application. Constant communication and advice has been key to the business being able to maximise their rebates for over 6 years.  Each year a new submission needs to be provided to Austrade, and Export Solutions have worked with staff to ensure this is completed within Austrade lodgement timeframes.  Some Issues Substantiating the activities of staff in overseas offices is important for claiming salaries.  Areas where current reporting procedures required improvement to comply with EMDG requirements were identified and implemented. There are legislated caps on certain categories of expenditure. Considering these in advance enabled Export Solutions to advise Cygnett on which expenses were required to maximise the grant, and thus avoid unnecessary work collating other items.

Key Benefits

Cygnett have been able to maintain connections with major clients in the UK on a real time basis by having an office in London.  Cygnett have been able to claim up to $200K of expenses per year to fund their UK office activities Participation in key marketing campaigns by their resellers that they would not otherwise be able to afford Through the GFC, EMDG underpinned the funding required to maintain their international marketing activities. The Future Cygnett are nearing the end of their time in the EMDG program, however, the funding opportunities that this scheme has provided enabled the business to expand their sales into over 50 countries.   They now have representative offices in the UK and USA with trade show booths as impressive as their range of products.