Opportunities for Australian agribusiness in China

Beef Central, 12/07/2013

When Michael Jackson, a beef farmer and specialist in agricultural real estate, was invited to join NAB’s Agribusiness team on study tour of China he almost said “no, thanks”.

“I’d just returned from America so it wasn’t the best time for another 10-day trip,” he says. “But David Brett, Head of Agribusiness for Northern Australia, explained why he thought it was such an important opportunity for me. He was right. I would’ve made a huge mistake if I’d missed it.”

Remarkable change

Jackson had been to China once before, just over 22 years ago, and he was stunned by the change. “It’s so much cleaner than it was then, and many people are enjoying a better lifestyle,” he says. “They want the best of everything, particularly for their children, and they’re prepared to pay for it. They consider food security to be paramount and this has put Australia in the box seat because they see us as being ‘clean and green’. At the moment, the biggest demand is for safe infant formula, followed by frozen beef and lamb.”

The Chinese are also busy building their own impressive facilities. “The abattoir we visited was incredibly clean and efficient, and run in a very similar way to those in Australia,” Jackson notes. “And the dairy processing plant we saw was the biggest and most modern I’ve ever come across. They were milking 10,000 cows and the plant had so many robotics it was like something out of another century.”

A second trip

Jackson identified a number of opportunities for himself and Australian agribusiness in general.

“The population is vast,” he says. “Taking the dairy industry as an example, we milk approximately 2.3 million cows in Australia and the average consumption is 105 litres per person per year. In China they milk approximately 14.9 million cows and, at the moment, their comparative average consumption is only 5 litres. But their intake is doubling every four years.”

Some Australians make the mistake of thinking that the size of the population and growth on this scale are guarantees of success. “In China, business is all about building trust and relationships and that doesn’t happen overnight,” says Jackson. “The people who do best respect cultural differences, pay attention to what potential customers want and are flexible enough to meet their needs.”

He also believes you must be prepared to spend time in China. “I’ve already been back once to continue the work of building relationships that started with the study tour,” he says.

The aim of the tour was to help NAB customers with potential for doing business in China to take the next critical step. Led by Khan Horne, General Manager of Agribusiness, the group of 17 beef, dairy and grain farmers travelled across China visiting farms and agricultural facilities, meeting people of influence and making valuable contacts.

“On our first night in Beijing we had dinner at the Capital Club with officials from the Australian Embassy and the Chinese Government as well as people from organisations such as Meat & Livestock Australia and the China State Farm and Agribusiness Corporation,” says Jackson. “During the trip we also met senior people from NAB and had opportunities to talk to Austrade representatives.”

This article was first published on NAB Business View and has been republished with permission.




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