Processing

Emerald abattoir investment call

James Nason, 07/04/2015

Plans to construct a new regional meatworks at Emerald in Central Queensland are gathering momentum according to the mayor of the Central Highlands Regional Council, Peter Maguire.

The council recently commissioned independent consultancy firm GHD to investigate the feasibility of a new abattoir at Emerald.

The resulting study supported the feasibility of a plant, concluding that it should be able to rely on throughput of around 100,000 slaughter cattle per annum from the Central Highlands, Barcaldine, Longreach, Barcoo, Blackall-Tambo, Winton, Diamantina and McKinlay Shires.

That catchment area produces an estimated throughput of 345,328 slaughter-weight cattle per annum, according to the report’s authors, however, a new facility would not be expected to attract that entire volume.

“It would be unrealistic to suggest an Emerald based facility could capture this entire throughput, particularly given the supply chain savings are relatively small (<=$10 per head),” the report states.

“It is also important to acknowledge that the modelling exercise does not account for potential differences in processing costs.

“While an Emerald facility could only expect to capture a proportion of the market share from municipalities where there is a supply chain saving, it is conversely true that the facility would receive some cattle from municipalities where there is a higher supply chain cost (e.g. Isaac, Quilpie, Cloncurry and Mount Isa) particularly if the facility catered for niche services including service kills not available elsewhere.”

The provision of service killing capacity would be a key attraction of a local plant for CQ producers, Cr Maguire says.

At present the only option to access a service kill is at Casino, close to 1000km in road transport away.

“We have producers sending cattle from here down to Casino to get cattle killed to go to the Middle East which is ludicrous,” Cr Maguire said.

The report identifies potential to tap into the growing export opportunities with South East Asia and into domestic market opportunities for premium and differentiated beef products.

“To me, that’s the really exciting part of the study,” Cr Maguire said.

“We’ve all seen the huge growth in popularity in wagyu, organic, certified grass-fed beef and the like, yet the closest abattoir offering that service is Brisbane and waiting lists there are long.

“There’s clearly a big gap in the market and the Central Highlands could be in a position to fill it, then reap the rewards.”

GHD suggested such a facility would cost between $73 million and $83m to build and close to $33m annually to operate.

Regional economic benefits include job opportunities; improved transport infrastructure; transport savings and value-adding opportunities for the beef industry; and demand for supporting goods and services.

The study is based on an operating model that would employ 168 people per weekday shift in the following roles:

  • Slaughter & Offal 50
  • Boning 90
  • Maintenance 6
  • Rendering 2
  • Administration 20

Land on Wilga Downs Road, west of Emerald, is identified as the optimal of four potential sites because of its adequate size and topography but road, power and water supply upgrades will be needed.

CHRC is now calling for expressions of interest from potential investors by May 7.

The Central Highlands Development Corporation worked in conjunction with GHD to ensure local producers and other key stakeholders were given the opportunity to be involved in the consultation process.

As part of that process local stakeholders which ownership structure they thought would be best for a meat processing plant in Emerald. 25 of 54 respondents favoured a cooperative as the preferred structure, while 10 each supported the options of development by an existing processor and an external investor.

“It’s clear that it’ll be a massive task to make this project a reality but the study has shown it’s definitely worth investigating further, so that’s what we want to do,” Cr Maguire says.

“It’s also compatible with other projects that are being conceptualised for the region, including the multimodal transport hub,” he says.

“The end result is a thorough and comprehensive report that’s going to enable potential investors to make informed decisions,” CHDC General Manager Sandra Hobbs. “It’s gratifying for CHDC to be part of such a promising project.”

Key points identified by local stakeholders in favour of a processing plant in Emerald included:

  • Increased competitiveness within the meat processing industry;
  • Opportunity for service kills and specialised niche marketing;
  • Increase job opportunities, economic benefits and diversity within the community;
  • Potential concerns were environmental, social and water supply impacts; and
  • Good level of support from producers and cattle industry as a whole.

The report suggested that a meatworks at Emerald would most likely affect the supply of cattle currently flowing to Rockhampton meatworks.

“Considering the shires for which an Emerald processing facility potentially offers supply chain cost savings, the cattle supply would be most likely sourced from existing Rockhampton facility demand.

“That is an Emerald facility offers Meat Supply Chain cost savings to four of the five shires that Rockhampton was calculated as being the current least cost option

“One major factor why Emerald has Meat Supply cost efficiencies over Rockhampton is due to the more expensive (on a per head basis) live transit leg of the supply chain is shorter, and that these cost savings are greater (on a per head basis) than the longer post processing (chilled meat and distribution legs).

“Beyond the results presented in this section, it should also be noted that there are some factors that could erode the supply chain cost advantages of utilising an Emerald facility; such as higher processing costs. Furthermore, further studies should investigate the distribution of demand within contestable shires to assess the competitiveness of the facility on a per farm basis.”

The report said that in relation to current cattle supply, which is or will be constrained as herds gradually rebuild, there is a 12.5pc latent processing capacity within existing abattoirs in Queensland.

“If slaughter rates continue to rise on trend, this latent capacity will be exhausted around 2020.

“Despite this latent capacity, there appears to be a considerable shortage of abattoir capacity for the provision of service and processing kills, catering for a growing range of niche, branded or value added products, including Wagyu, organic, certificated grassfed and MSA.

“Consultation suggests that a large number of cattle are being transported south to Casino and as far a Victoria and South Australia for access to service killing and processing, with one supply flagging the possibility of processing 30,000 head per annum in a future Emerald abattoir.”

The full GHD report can be viewed at www.centralhighlands.qld.gov.au and www.chdc.com.au.

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Comments

  1. Jeffrey Allen, 26/10/2016

    there is no need to build big catherals of touy to dresss a few catttle. i dressed more tha a quarter of a illion with a knife, cleaver, winch and saw. yes split thousands with a cleaver.
    the livesttock industry needs many processing plants scattered about close to where the livestock live. the animals should move to the city in boxes. my website “Cheaper Meat Processing” describes a very different way of dressing and boning cattle. i hve an explanation of how to build a mechanical dressing system. i am sure we could kill 3 or 400 a day in a building costing less than 10% of the new modern works.

  2. Rod Moore, 08/04/2015

    Edgar – only JBS has a works in Townsville – correct- Is JBS about to cop a BRAZILLIAN hair cut in China? – message is out there – as Tony Abbott said be alert not alarmed – when it happens and happen it shall.

  3. Rod Moore, 08/04/2015

    Correction; It would appear one cannot add up. The travel time from Port of Brisbane – Point A – load a container then return to Port of Brisbane – Point A is greater than 40 hrs Heavy Vehicle travelling time. Could transit by Rail – would be a longer period of time from Point A back to Point A
    Business plan for this project is all Important, it must spell it all out, clearly and accuracy.

  4. Rod Moore, 07/04/2015

    had a quick read of the 285 pages. What impressed me was the 650 sq mtrs of Slaughter Floor space compared to 1300 sq mtrs for chilling 450 units X 5 days = 240 days per 12 months operations. A Fabrication area of 1300 sq mtrs compared to the 450 sq mtr for administration – one would think it best to be in the administration side of this concept – rather than a Production person. Where is the all Important Bussiness Plan. Vesteys owned a site for 25 plus years at Emerald as did one other processor [ that still remains in the Industry today ] for in excess of 18 years- both sold when the Mining Boom was at the top- Good luck to them – 18 hrs heavy vehicle time from Port of Bne – one way = 32 hrs travel, plus load time for a 40′ of 4 hrs, total 36 hrs min , turnround, to move product from 85 to 90 head, just does not stack up.

  5. SAM staines, 07/04/2015

    WOW-a couple of feedlots to give continuity of supply and Emerald becomes the hub its geographic position demands. Plenty of supply scope in the north.The Eastern side would suit me better all the best
    Sam Staines

  6. James Cutler, 07/04/2015

    100,000 cattle per yr is approx 420 hd of cattle per day. The cost to run an AQIS accredited export facility to do only 420 hd per day is financial suicide. Complete uneconomical.. And 2 people to run a rendering plant 24hrs per day. What tonnage does the rendering plant have? I bet it cannot render 420 head of cattle in 8 hours!
    20 admin staff. I hope this includes cattle buyers!
    If it can’t do 1,000 head per day, forget it.
    Plants are closing because its either get big and serious or get out.

  7. Edgar Burnett, 07/04/2015

    I hope GDH has factored in the level of opposition from the existing duopoly of Multinational Meat Works. A classic example of how they carry on when confronted with extra competition, is what happens when a Live Cattle Export Boat is coming up to be loaded in Townsville. Often the Townsville Multinational suddenly finds that it has quite a bit more money to offer local graziers for their cattle to the extent that their Price Grid is often as high as or higher than that of their Works in Brisbane! And then when the boat is full, they suddenly find that they have bookings for weeks again and consequently drop their price.
    Anybody who intends to build a Works within 1,000 km of any of this Duopoly’s Works must have an endless pit of money or little perception of reality, one or the two.
    One main reason why AA Co’s Work in Darwin should prosper is because of its’ location so far away from any Works operated by this Duopoly.
    As far as better access to the Works in Rockhampton is concerned, surely it is high time that the Government should fix that. And as far as this “booked up for months” is concerned, don’t be surprised that it is a game that the Multinationals play for their own benefit.

  8. Sandra Baxendell, 07/04/2015

    It would be a great idea if it also slaughtered goats as well

  9. Dale Dennis, 07/04/2015

    What a brilliant idea. I hope they can get it over the line.It is such a nightmare trying to get 4 decks of cattle to the 2 existing works in Rocky. They call it the beef capital of Australia. It is a joke. I have a 4 deck unit & cart our own cattle. Townsville is booked out months in advance. Especially now Innisfail & Bowen plants are closed.The last 2 years we have had to use B-doubles at $100/head to cart to Beenleigh as the works are all booked out in the North & central.

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