Tuesday, May 27, 2014

Wellard in China meat deal

WA-based agribusiness Wellard has scored two major breakthroughs in trade with China as it prepares for a boom in exports of livestock and processed red meat.

Wellard's business ties have grown to include the air freight of breeding stock for sheep producers in Inner Mongolia. And its Beaufort River Meats abattoir has been accredited to export lamb and mutton to China.

The first container of boxed meat from BRM is on its way to China and Wellard is celebrating a 100 per cent survival rate on a consignment of 1200 dorper rams and ewes flown from Perth to Hohhot.

Wellard managing director Mauro Balzarini said the company was also developing assets in China and Australia in anticipation of authorities clearing the live export of feeder and slaughter cattle.

"When China opens up a market for a commodity it is never for a small quantity, so for cattle you need to understand that moving high numbers requires a logistics structure," Mr Balzarini said.

"We are preparing a strategy for China. Put it this way, if you are a buyer of slaughter cattle in China at the moment Wellard is the most beautiful girl in the room to join forces with."

Mr Balzarini, who was in China last week, said Wellard had key production and logistics assets, a strong record in export and an expertise in operating processing facilities overseas.

Its assets and operations include eight farms covering 35,700ha in WA, feedlots and three modern ships. BRM process up to 2500 sheep and lambs a day, and the company also runs an abattoir in the Philippines.

Mr Balzarini, whose grandfather founded the family livestock empire in Italy, said he would only consider outside investment in Wellard under certain conditions. However, unless there was "a strong alignment of interests" he would prefer to develop Wellard from within.

Mr Balzarini said Wellard was on track for one of its best trading years following a $53 million loss in 2012-13. "Last year was tough for everyone. The quality of our people and quality of our assets allowed us it turn it around so quickly," he said.

Wellard is booked to supply more than 25,000 Australian and New Zealand dairy and breeder cattle to China before the end of the year.

It regards the dopler consignment, which is in quarantine in China for 45 days, as the first of many. The sheep were purchased by a privately-owned farming organisation seeking to boost flocks and improve genetics.

Mr Balzarini also flagged increasing capacity at BRM to meet demand from China.

"It is bit of learning curve for us sending lamb and mutton to China because we haven't done it before," he said.

"I'm confident that we will boost business for BRM and also it might prompt us to look at upgrading the plant to produce more than we do now because we are fully booked.

"Wellard is very well positioned to take advantage of growing demand for beef, sheepmeat, beef cattle, dairy cattle and sheep genetics in China."

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