A joint venture headed up by the former managing director of Wellard Rural Exports has spent $50 million in the last 12 months acquiring grazing properties across two states and a feedlot, to create a livestock supply chain into global markets such as China.
Steve Meerwald, who spent almost 30 years with Wellard, is now the director of Harmony Agriculture and Food (HAAFCO), which has partnered with Chinese company Hopshun Australia, which is owned by real estate giant Dalian Hesheng Holdings.
The joint venture has bought a grazing block near Esperance and a feedlot at Kalannie in Western Australia, and most recently purchased a 6,400-hectare grazing property at Dundonnell, in western Victoria.
“It’s a business model we’d (HAAFCO) been developing over the previous 12 months, putting together a really strategically focussed supply chain based on food, predominantly livestock,” said Mr Meerwald.
“A supply chain that was focussed on customer needs, was efficient, used all the latest technology and analytics to drive efficiency and be rewarding for all participants.
“We did a feasibility study, presented it to Hopshun Australia and they were convinced that not only did it suit the supply of livestock and produce through their shipping assets, but it was something they believed in longer-term for the global food trade.”
Asked if the joint venture was looking to buy more assets as part of its integrated food strategy, Mr Meerwald said the current focus was on the integration of the existing assets “while preliminary due diligence on some smaller acquisitions is carried out.”
Sino Marine prepares to enter Australia’s livestock shipping market
Hopshun Australia is also part of a consortium called Sino Marine, which has purchased two small container vessels and converted them into livestock ships capable of exporting up to 5,500 head of feeder cattle or 20,000 sheep.
Steve Meerwald has been acting as a consultant to the group and said the first ship, MV Yangtze Harmony, is due to arrive in Australian waters later this month, where it is expected to be loaded with sheep for the Middle East on its maiden voyage.
Mr Meerwald said the ships were built for the global live export market, not just the trade between Australia and China.
“They’re being set up for the global livestock trade, a part of which could be the supply of cattle from Australia through to China, but they’re not being built purposely for that,” he said.
“The trade of slaughter cattle to China has been very slow and likely to stay that way.
“Australian cattle are very expensive and China is a price-sensitive market, so high-value Australian cattle going in there don’t really commercially work at the moment.”
Mr Meerwald said Sino Marine plans to initially ship sheep to the Middle East and cattle into South East Asia.
The ceremony to launch MV Yangtze Harmony is happening today at the Chinese port of Dalian.