Indonesia shelves plan to buy Aust cattle station

Beef Central, 05/05/2014

The ongoing weakening of the Indonesian Rupiah against the US dollar has prompted Indonesian Government-owned agribusiness PT Rajawali Nusantara Indonesia (RNI) to shelve its plans to buy cattle breeding properties in Northern Australia.

RNI Director Ismed Hasan Putro told the Indonesian media late last week that exchange rate movements, and uncertainty over the Indonesian agriculture ministry’s policies on cattle import permits, had made the plans unfeasible.

“At first, we were looking at a Rp 9,600 [83 US cents] exchange rate against the dollar, but now it has risen to Rp 12,000,” Ismed said, as quoted by

He added that the lack of an import permit from the Indonesian Ministry of Agriculture was also why the company chose to delay the purchase.

RNI last year said it planned to pay up to 350 billion Indonesian Rupiah ($A 32 million) to acquire a 51 percent stake in a large Australian cattle breeding operation running between 50,000 and 500,000 cattle, in line with plans to improve the security of Indonesia’s beef supply.

In October last year Ismed said RNI had assess five operations had hoped to finalise an acquisition by the end of December.

30pc of the budget was to have come from the Indonesian Government with the remaining 70pc to be funded via loans from state lenders.

At the time Indonesia’s State-Owned Enterprises Minister Dahlan Iskan said it was five times cheaper to breed cattle in Australia compared to Indonesia, but much cheaper to feed cattle in Indonesia than Australia.

“So, the cattle will be bred there but we will rear them here,” said Dahlan.

During his first visit to Jakarta as Prime Minister late September last year Prime Minister Tony Abbott emphasised his support for Indonesia’s planned investment in Australia’s cattle sector.

Indonesia’s long term-term goal is to achieve self sufficiency in beef production, but it the meantime it sees direct investments in Australian breeding cattle properties as a means of improving the security supply.



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