$200million For WA In Meat Trade Deal with China

A new joint venture project will significantly increase Western Australia’s meat and fodder exports to China and inject hundreds of millions of dollars into the local economy.

Agriculture and Food Minister Ken Baston today congratulated the State’s largest red meat processor, V&V Walsh, on the export project.

“With an estimated investment of $1billion over five years, the project will involve Bunbury-based V&V Walsh, as well as China’s largest red meat importer from Australia and New Zealand, Grand Farm, and the Inner Mongolian Government,” Mr Baston said.

“There will be investments in both jurisdictions – $200million of Chinese investment into WA to increase lamb and beef production; and $800million in Inner Mongolia, where there are plans to develop new processing facilities and an expansive network of feeding systems.

“V&V Walsh plans to provide frozen boxed meat to Grand Farm and will require an extra 500,000 lambs and 30,000 cattle per year during stage one of the project, so this will no doubt create employment opportunities.”

The Minister said the Department of Agriculture and Food WA (DAFWA) would provide technical support during the project’s pilot stage to develop feed production systems, genetics and breeding, formulated feed, biosecurity and training in sheep and cattle husbandry.

Prospects for growth of beef and sheep meat into China are high. In China, each person consumes an average of 4.9kg of beef a year and 2.8kg of sheep meat. By comparison, Australians consume an average 32.5kg of beef and 10kg of sheep meat.

“For every one kilogram of extra lamb meat consumed in China, an extra 65 million lambs will be required. And for every one kilogram of extra beef consumed in China, an extra 6.5 million cattle will be required. WA has the very significant opportunity to grow exports,” Mr Baston said.

“I commend V&V Walsh on this project. I’m sure the opportunities this joint venture opens up will benefit WA producers into the future.”

V&V Walsh has made substantial investments to increase the capacity of its abattoir in Bunbury and is in the final stages of gaining approval to export to China.

This is a joint venture between Grand Farm president and China’s Beef and Lamb Association chairman Mr Chen Xibin and brothers Peter and Greg Walsh of V&V Walsh.

The WA pilot project will complement plans by Grand Farm and the Government of Xilinhot to build a world-class new industry, including research and development in Inner Mongolia.

Stockfeed manufacturer and livestock producer Milne AgriGroup recently travelled with V&V Walsh and DAFWA representatives to China to look at opportunities for its potential involvement in the project’s supply chains, in terms of sourcing fodder and cattle.

Fact File

  • Sheep meat exports from WA to China rose 77% by weight between 2012 and 2013. In 2013, China was the number one market for sheep meat exports from WA, with trade worth $47million
  • Currently WA has about 1.9 million beef cattle and 15.5 million sheep
  • In April 2014, Grand Farm’s president, Mr Chen Xibin, visited WA and met Minister Baston, Peter Walsh and DAFWA representatives to discuss the project.
  • Senior representatives from DAFWA, V&V Walsh and Milne Feeds recently visited Inner Mongolia and Heilongjiang Province
  • The project’s estimated value of $1billion over five years will include investment in livestock production in WA.
  • In Inner Mongolia the investment includes land purchases for state-of-the-art feedlots, a research and development centre and also processing facilities.
  • These facilities will produce small goods and cooked lines – which are in demand as diets incorporate more Western-style dishes
  • Grand Farm is China’s biggest importer of sheep meat and the third biggest importer of beef. Grand Farm sells to a chain of high-quality stores across China
  • The new facilities will significantly boost the capacity of Grand Farm and complement its state-of-the-art facilities in Harbin, Heilongjiang Province in Northern China

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