Elders has confirmed it is moving ahead with plans to establish a feedlot in Vietnam, replicating the successful supply chain model it has pioneered in Indonesia.
Members of the Elders board held an historic first Elders Limited board meeting in Jakarta last week during a tour of the company’s integrated cattle feeding and beef marketing operations in Indonesia.
While in Jakarta the board members also sampled high-end beef sold under Elders’ brand in Indonesia during a dinner with Australia’s ambassador to Indonesia, Paul Grigson, and visited the Jakarta based feedlot of major Indonesian cattle importing company TUM.
Elders CEO Mark Allison told Beef Central that it was important for the full Elders board to gain a first-hand understanding of the company’s Indonesian supply chain.
“Given that Indonesia is our model – that is the model of live export into our own feedlot, through our own abattoir and then branded product through top end markets, and we’re expanding our feedlot in Indonesia at the moment, we thought it was appropriate that the board saw first hand how we are working in the country.”
He confirmed that Elders is now scoping opportunities to develop a similar model in Vietnam.
The project is being overseen by Dick Slaney who has developed and managed the company’s supply chain in Indonesia over the past 13 years (Read more about Dick Slaney and Elders Indonesia in this earlier profile article here)
“We have put two additional people in Vietnam and we are scoping our feedlot development there now,” said Mr Allison, who also recently visited Vietnam.
“We’re looking at the south obviously with tropical cattle as per the Indonesian model and also up around Hanoi, and we’re doing our due diligence now.”
He said Elders understood what made a successful supply chain model, based on its depth of experience in Indonesia and China and its own feedlot and livestock operations in Australia.
“We have deep knowledge, we have been in Indonesia for over 14 years, and we have been in China for over 10 years,” he said.
“We have been operating in the top end of the market in China with our branded beef business into hotels and five star restaurants, that business is making money now, we’re starting to consolidate that model.
“I think it takes time to really understand markets and we’re hastening slowly, with that deep background knowledge.”
He said there were no specific timeframes in place for a Vietnamese development, saying the company was taking a “low pulse rate, prudent approach”.
“From an Elders viewpoint there is no rush, we want to do it properly, and we believe we have the right model.”
On the status of the Indonesian market, Mr Allison said that regardless of the tensions currently being felt between Australia and Indonesia over this week’s executions of drug smugglers Myuran Sukumaran and Andrew Chan, at an industry level both countries continued to enjoy a strong relationship.
“I think that regardless of the background noise that we’re seeing now, it remains a very positive market and I think the industry is working really well together to ensure it remains a positive market.”