Live Export

Trade slowdown impacts Livecorp finances

James Nason, 27/10/2011

 

Paul Morris from DAFF addresses yesterday's live export conferenceAustralian live export leaders say they are looking forward and not back as they seek to rebuild a stronger and more robust industry underpinned by supply chain assurance systems in every market.

Certainly there was little joy in looking back for any of the 100 live export industry representatives who gathered in Adelaide yesterday for the annual general meetings of Livecorp and the Australian Live Exporters Council.

The devastating blow of a two-month ban on exports to the major market of Indonesia in the wake of footage showing Australian cattle being subjected to cruelty in  Indonesian abattoirs will hang large over the industry for years to come.

The impact of that shutdown was manifested in red ink on a projector screen showing the balance sheet of the industry’s levy-funded service delivery company, Livecorp, yesterday.

Australia is only likely to export 400,000 cattle to Indonesia for the 2011 calendar year instead of the anticipated 500,000, as a direct result of the ban.

Fewer exported cattle translates into fewer levies paid by exporters, and in turn, less revenue for Livecorp. It has posted a $416,099 operating loss for the 2010-11 financial year, down from a $427,614 profit the previous year.

Incoming Livecorp chief executive officer Robert Sutton attributed the financial attrition to reduced levy revenue and the accelerated costs of defending the live export trade towards the end of the financial year.

Industry representatives at yesterday’s meetings certainly found greater value in looking forward, and have clearly drawn comfort from the Federal Government’s strong public backing of the industry in the past week.

Last Friday, in announcing the Government’s response to a review of the trade by former Australian diplomat Bill Farmer, agriculture minister Joe Ludwig said the Government viewed the live export trade as an important long-term industry for Australia.

ALEC chairman, Peter Kane“Clearly exporter confidence was severely damaged when the ban came into place,” Australian Live Exporters Council chairman Peter Kane said.

“But each additional step that we go along, including the Government’s long-term commitment to the industry and the Government’s commitment of funds to help rebuild the industry, clearly those things will build more confidence among the exporters themselves.”

Department of Agriculture, Fisheries and Forestries spokesman Paul Morris told exporters that the roll-out of new assurance-based supply chains similar to Indonesia in every live export market by December 2012 would help to underpin a stable future for the trade.

In the past the Government had only one lever to pull when confronted with a serious problem in a live export market – to simply close the trade. Under the new approach problems in individual supply chains could be addressed without affecting others or entire markets.

Livecorp chairman Dr Roly Nieper said that despite the impacts of the Indonesian cattle ban, the industry was now in a far stronger position than it was before.

“We cannot gloss over the financial scars and damage to the industry sustained during this incident, it has been costly to exporters, it has been costly to cattle producers, and it has been costly to the organisations that support them,” Dr Nieper said.

“However today we meet with a trade to Indonesia that is open, and we again have a Government that recognises the trade is important and valuable to the Australian economy.

“We have a clear regulatory pathway on which exporters can build a solid platform for their businesses, and exports to Indonesia growing.”

Livecorp CEO Rob Sutton is currently overseeing a sweeping review of Livecorp’s operations which will shape the future structure and direction of the service organisation.

Despite the impact of the Indonesian ban, the industry was enjoying solid long-term growth.

Exported cattle volumes in 2010-2011 totalled 806,000 head, which represents 26pc growth over the past five years.
 

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