AUSTRALIA’S largest livestock exporting company Wellard Limited has today placed an order for 2000 Angus and Black Baldy steers, which which will comprise its first shipment of slaughter cattle from Australia to China.
Wellard is sourcing 530kg-630kg steers from below the Bluetongue line for delivery to Portland in mid-October, with shipment expected in late October.
The development follows recent downward shifts in the price of Australian cattle which have helped to remove a major barrier that has stifled the trade’s development since Australia and China signed a new cattle export protocol to open the market in mid-2015.
Wellard Limited has been buffeted by tough trading conditions since publicly listing in late 2015, having announced substantial losses and losing significant share-price value since that time.
The company has constantly pointed to the potential growth that exists in the beef cattle export trade to China as a reason for investors to stay positive about its future.
Last year Wellard CEO Mauro Balzarini predicted the trade was on the cusp of developing into a one million head per year business.
However, the continued high price of cattle in Australia due to drought-forced herd rundowns has largely stifled trade activity since the market was opened with the signing of a protocol between Australia and China in mid-2015.
The recent fall in cattle prices that has helped to trigger this deal would also be expected to underpin more business between other Australian exporters and China customers in coming months.
The only previous consignments of live cattle from Australia to China since the protocol was signed were three air-consignments and this year’s sea shipment organised by Elders and North Australia Cattle Company.
Wellard Limited announced today it will ship approximately 2000 cattle to be loaded for the shipment from south east Australia.
The cattle are being supplied to Rongcheng HCMH Trade and Service Co., Ltd, a subsidiary of Tai Xiang Group, which is an established Chinese company specialising in frozen and processed food.
The shipment, despite being relatively small, is the largest to date of this type and represented a very significant step in the Company’s implementation of its strategy for China, said Wellard CEO and Managing Director Mauro Balzarini.
“We have been working very hard to develop the China market for a long time and I would like to congratulate Wellard’s China Team, and particularly Scot Braithwaite, Bernie Brosnan and Eva Fu for their fantastic marketing effort.
“We see this as the start of a long-term relationship with clients in China, in the same professional way we have worked closely with our customers in other markets for the last three decades, including establishing ESCAS supply chain integrity with a special emphasis on animal welfare.
“As we have stated before, China offers big potential for Wellard and the Australian cattle industry in general, and we are confident this first shipment will pave the way for the development of a more regular trade and grow our exports to China.
“This will benefit Wellard’s stakeholders and also producers in Australia as China will import cattle with different specification to Vietnam and Indonesia.”
The cattle will be quarantined and then processed in a purpose-built facility in China, which has been ESCAS (Exporter Supply Chain Assurance Scheme) accredited.
Wellard said the sale contract is subject to conditions precedent including receipt of a deposit and completion of all letter of credit requirements.
Wellard Ltd’s share price was trading 1.5c higher for the day at 14c following this morning’s announcement.