A group of northern cattle producers will start a feasibility process next week to investigate the viability of establishing a new meat processing plant in north western Queensland.
The NorthBeef group was formed last year by a group of 60 Hughenden-area cattle producers who collectively turn off between 20,000 and 30,000 cattle per year.
Group spokesman Rob Atkinson from Katandra at Hughenden said northern producers were keen to see greater competition for their cattle, and believed scope existed for a second abattoir in the north.
JBS operates the far northern region’s only major plant at Townsville, which has the capacity to process 900 cattle per day.
The NorthBeef group will call for consultants to tender for the feasibility study project next week. Mr Atkinson said the study would aim to identify the most appropriate location for a new northern processing plant.
The group believes a location along the Flinders Highway between Charters Towers and Cloncurry will be the most likely option, giving a local plant access to over three million cattle in the north and north west.
Once the feasibility process is completed, and provided it gives the green light, the group will then develop a prospectus to encourage investors to fund the project.
NorthBeef secured Queensland Government backing for its feasibility study earlier this month.
Queensland primary industries minister Tim Mulherin said recent events in the live export trade had highlighted the northern cattle industry’s over-reliance on a single market.
"An enormous swathe of Australian cattle country currently isn't served by local meat processing facilities – if you draw a line diagonally from just above Townsville to Perth, you would find no abattoirs north of this line," Mr Mulherin said.
"A new abattoir could reduce the need to truck cattle large distances to southern processing plants and provide alternative markets for producers."
Northern plants have suffered in the past from an inability to secure the year-round supplies required to maintain a viable business, particularly during the tropical wet season. The meat processing sector is also experiencing difficult trading conditions at present, with a high Australian dollar reducing the price competitiveness of Australian boxed beef into key export markets such as Japan and Korea.
Mr Atkinson acknowledged that the project faced challenges, but said there were strong reasons to believe that a second abattoir in the north was a viable proposition.
Northern cattle numbers had increased substantially since local abattoirs including Tancreds Pentland, Mt Isa and Cloncurry fell by the wayside 25 to 30 years ago and the live export trade emerged, he said. Where sheep once dominated the Flinders/Mitchell grass plains, cattle had now all but replaced them. The country had also proven to be handy for fattening cattle, Mr Atkinson said.
The move by Indonesia to impose 350kg weight limits on imports last year had also increased the number of cattle flowing back to domestic processors from the north.
“There a lot more cattle in the north now than there were when those plants were around,” Mr Atkinson said. “We know how long the queues are in Townsville, there are often times when you can’t get in for four or five or six weeks.”
Locating the plant in an area that could source cattle from a range of catchment areas such as the Mitchell grass downs, northern parts of central Queensland, the Atherton Tablelands and the Peninsula would be essential to securing cattle during the four month wet season. Mr Atkinson said the plant would have to operate for at least 10-11 months of the year and process 500 head per day or more to achieve the economies of scale required to remain viable.
He believed key requirements such as water, transport infrastructure and labour were readily available in the north.
He suggested that potential efficiencies could be achieved by shipping meat to export destinations from Townsville.
“One of the big issues for us is that all the processors freight their boxed beef down to Brisbane, and then ship out of the port of Brisbane, and then it sails straight back up past Rockhampton, Mackay and Townsville again heading for Asia,” he said.
“It is just such a shame we can’t ship out of Townsville, Townsville has got three shipping companies there, we have talked to them, they are willing to ship 40 foot refrigerated containers.
It is things like that that we believe there is room for improvement in.”
Mr Atkinson and two NorthBeef members flew 4000km across the north last month and met with 150 producers and cattle industry stakeholders including bankers and livestock agents, and said they received universal support for the concept.
NorthBeef has recently formed a project management group with the Mount Isa Townsville Economic Zone (MITEZ), which represents the shires between Townsville and Mt Isa, and Gulf Savannah Development, which represents the Gulf shires of Burke, Carpentaria, Doomadgee, Etheridge and Mornington, to oversee the feasibility study process.
The NorthBeef group has already had preliminary negotiations with potential investors in Australia and in Asia and Europe.
“A couple of the Asian investors we have spoken to are saying they are looking for long term commitments to supply beef.
"Market, labour and capital are the big ticket issues in this whole proposal.
“The Asian companies we are talking to are saying there won’t be a marketing problem because they will take every hair, every hoof, every horn, every piece of meat off the kill floor, so marketing becomes a non-issue to a very big degree," he said.
“Other investors are looking at 457 visas and supplying some of the labour fly-in, fly-out into mining camp style accommodation. They are some of the options that may be available to solve some of the issues surrounding a processing plant.
“While overseas investment may not be what everyone wants, we are basically saying we want more competition for our beef, that is what we feel is needed.”
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