Live export initiative secures investor interest

Pilbara pastoralists could send Australia’s historic first shipment of cattle to China after operators of Hedland’s live export yards took an important step towards securing Chinese investment.

Hedland Export Depot operators Melreef last week showcased local facilities to Chinese investors before signing an understanding to form a joint venture company to manage live exports from the Pilbara to China.

Melreef director Chris Cooper hoped to formally enact the joint venture within the next two months in a deal that could springboard Hedland ahead of competing export ports.

“This initiative is highly likely to establish the first of hopefully many options available for live exports into China,” he said.

“We are expecting that the time frame would be sometime towards the end of the year in terms of the first export.”

Should the joint venture get off the ground, it would face stiff competition from across WA after the recent China-Australia free trade agreement paved the way for the historic first shipment.

This month, the Department of Agriculture and Food WA guided business leaders from Zhejiang and Hainan Island on a tour of ports, saleyards and abattoirs from WA’s South West to the Kimberley.

Yet Mr Cooper maintained Melreef’s independent venture was already “a fair way down the track to establishing a full supply chain from farm through to consumer in China”.

“The (investors) we are dealing with are very positive in gearing up, they have government approval and a logistics chain that fits into the whole solution in China,” he said.

Yet there will still be infrastructure challenges.

New port facilities, including a holding yard and abattoir, would need to be built in China, Mr Cooper said.

The Hedland Export Depot itself has long been rebuilding its business after being brought to its knees by the Federal Government’s 2011 temporary ban on live exports to Indonesia.

Mr Cooper said it had support from the Town of Port Hedland and the Pilbara Ports Authority, operators of the world’s largest bulk export port, to improve Hedland infrastructure.

He said the Town had expressed interest in a future abattoir, while the PPA was already investing $200,000 into its facilities and had hopes of building a new port development geared towards live exports.

“The volumes of cattle that the Chinese are looking for are substantially greater than what has gone through (Hedland) previously,” Mr Cooper said.

“We discussed this with the port and they clearly indicated to us they would be very happy to meet this increased volume.”

“They have a great deal of planning already in place.”

A Pilbara Ports Authority spokeswoman said the port had been pleased to meet the recent Chinese delegation and was working towards shipping livestock mid-year.

In addition to infrastructure challenges, the Hedland depot would also need to find heavier cattle.

Cattle producers currently supplied cattle to Indonesia, which spent between 60 and 90 days fattening in Indonesian feedlots before being slaughtered.

However, Chinese customers wanted fattened cattle that were ready to go straight to market, spending only around 14 days in feedlots, Mr Cooper said.

Such an arrangement could challenge Pilbara pastoralists, who might find it difficult to keep their cattle grazing long enough on the region’s drought prone rangelands to ship at the heavier weight.

However, Mr Cooper said stations, such as Pardoo Station, 120km east of Hedland, might have the answer.

Pardoo has tapped groundwater reserves to grow cattle feed using pivot irrigation, a set-up Mr Cooper said could not only help fatten cattle but allow pastoralists to weather droughts.

With a number of challenges still ahead, he said a fully ramped up export industry could take two years to achieve.

“What we are trying to do is build a supply chain, the volumes of cattle we are looking at, currently are probably not there,” he said.

“We are very keen to sit down and talk with (producers) and discuss the opportunities that are available to them.”

“(But) the Chinese realise, particularly from a logistics perspective, the Port of Port Hedland is in a very good position to make this happen.”