The Australian Agricultural Co board has approved the commencement of civil works and the appointment of a project manager for its meat processing facility near Darwin in the Northern Territory.

The plant at Livingstone Valley, 50km south of Darwin, will be developed at a total capital cost of around $85 million.

AA Co chairman, Donald McGauchie, said the decision was a significant milestone for the company and a natural next step towards vertical integration, particularly given AA Co’s proximity to the growing Asian markets.

“The board determined that the project fundamentals around a processing plant in the NT are compelling, and believes it will secure the long term future of Australia’s northern pastoral industry,” he said.

AA Co is continuing with its outlined objective of raising third-party equity in the project, and says it is involved in discussions with a number of potential investors who have expressed interest in the project. The company would also have access to internal sources of capital, should available third party terms prove unattractive, it said in a statement issued minutes ago.

“AA Co welcomes further engagement with both the Federal and State governments to pursue staff training opportunities and the development of community assets, including port, roads and regional medical facilities, to advance the critical public infrastructure required to secure optimisation and security of this project,” Mr McGauchie said.

Following the purchase of the land and planning approval, detailed planning for the facility is well advanced, with the project manager, principal contractor and earthworks contractor to be appointed shortly and civil works expected to begin within the next two weeks.

Earthworks would take 10-12 weeks to complete, the company said. Tender documents have also been released for drainage concrete, steelwork, insulated panel and specialised equipment.

Facility construction and equipment installation is expected to be complete in the third quarter of next year, with commissioning beginning immediately.

The plant will be built as a hot boning facility with flexibility to incorporate chillers for prime cattle processing when required.

The facility has a design capacity of up to 225,000 head/year, with a proposed throughput of around 200,000 head/year once production levels are achieved.

AA Co says the facility will create 260 direct and a further 530 indirect jobs, including substantial new opportunities for indigenous and female workers in the region. It is forecast to inject $126 million a year into the local economy, will be efficient from a carbon emissions standpoint, and improve animal welfare outcomes.

The balance of the 600ha site not covered by the plant footprint will comprise irrigation zones, natural wetlands, ponds and other areas providing facility and amenity to the site. The additional land purchased will ensure a sufficient buffer zone between the abattoir and adjoining areas.

Experienced, established Australian processors continue to cast doubts over the commercial viability of the project.