May 12, 2017

 

 

China's New Hope Group is reported to have "secretly partnered" with Australia's Hancock Pastoral to sell and deliver up to 80,000 northern Australian cattle yearly to China, The Australian reported. 

 

The animals will then be slaughtered and processed in the country, a $2 billion sector, according to the report. New Hope has also planned to invest $1 billion in Australian farms, food processing sectors and agribusinesses by 2020.

 

In preparation of receiving the animals, a memorandum of understanding will be signed between the companies and the Zhejiang provincial government this month to set up a huge cattle feedlot, quarantine and meat works facility in southern China.

 

The development will help to cut down manpower and production costs. Furthermore, all parts of imported cattle can be sold and consumed fresh, including offal and organs which are sold at high prices in China.  

 

The cattle will be originate from the three northern Australian ports of Broome, Darwin and Townsville to Zhejiang's island port of Zhou Shan, south of Shanghai.

 

Over at the specially approved Free Trade Zone for Australian agriculture and food exports to China, New Hope will construct a feedlot, as well as quarantine and meat-processing facilities.

 

Gina Rinehart, who leads Hancock Pastoral, has implemented a live export strategy ""that could double the size of Australia's $1.5 billion cattle export sector.

 

"This is a long-term plan in which we are trying to build on the market opportunities that have come out of the China-Australia Free Trade Agreement," Adam Giles, business development manager of Hancock Pastoral, said. "We are in negotiation with a couple of different companies for offtake agreements in China, but these new market opportunities will also require supply agreements with Australian pastoralists and the building of new infrastructure across northern Australia."

 

According to The Australian, the sale of Australian live cattle to China is still in its early stages. The first shipment happened in February this year, with a delivery of 1,200 beef cattle from Victoria's Portland to the northern Shandong province.

 

Hancock Pastoral intends to expand and develop its own 300,000 beef cattle herd by investing in pastures and water. It expects to supply about a quarter of the burgeoning Chinese demand for live cattle.

 

The rest of the cattle under the Hancock-New Hope deal would be acquired by the consortium from other northern Australian cattle producers and companies.

 

The New Hope Group owns Australia's fourth-biggest abattoir Kilcoy in southern Queensland. It also holds a majority stake in Australian Fresh Milk Holdings, the joint venture dairy company it established with Freedom Foods and the Perich and Moxey families to expand intensive shedded A2 milk production in New South Wales.

 

New Hope also plans to invest significant funds to increase food production across northern Australia, with smaller paddocks, more watering points and better pastures capable of boosting the carrying capacity of many cattle stations fourfold.

 

- The Australian