Agricultural mogul Steve Meerwald has spent $50m in the last 12 months as part of a joint venture to create a livestock supply chain to China.
Meerwald, director of Harmony Agriculture and Food (HAAFCO) and former managing director of Wellard Rural Exports, has partnered with Chinese company Hopshun Australia, which is owned by real estate giant Dalian Hesheng Holdings, to acquire land across two states and a feedlot.
The joint venture has bought a grazing block near Esperance, a feedlot in Kalannie in Western Australia and a 6,400-hectare grazing property at Dundonnell, in western Victoria.
Meerwald told the ABC the joint venture was a long-term project aimed at having a global reach. Its markets will include China and the Middle East.
“It’s a business model we’d [HAAFCO] been developing over the previous 12 months, putting together a really strategically focused supply chain based on food, predominantly livestock,” he said.
“We did a feasibility study, presented it to Hopshun Australia and they were convinced that not only did it suit the supply of livestock and produce through their shipping assets, but it was something they believed in longer term for the global food trade.”
Hopshun Australia is also part of a consortium called Sino Marine, which has purchased two small container vessels and converted them into livestock ships capable of exporting up to 5,500 slaughter cattle or 20,000 sheep.
The vessels, based in the Chinese shipping port Dalian, Liaoning province, and worth $33m, have been approved for sailing in Australia and are expected to be in operation this month.
Meerwald has been acting as a consultant to the Sino Marine group and said the first ship—MV Yangtze Harmony—is due to arrive in Australia later this month, where it is expected to be loaded with sheep bound for the Middle East on its maiden voyage.
He said the ships were built for the global live export market, not just trade between Australia and China.
“They’re being set up for the global livestock trade, a part of which could be the supply of cattle from Australia through to China, but they’re not being built purposely for that,” he said.
“The trade of slaughter cattle to China has been very slow and likely to stay that way.
“Australian cattle are very expensive and China is a price-sensitive market, so high-value Australian cattle going in there don’t really commercially work at the moment.”
Meerwald added that Sino Marine plans to initially ship sheep to the Middle East and cattle into South East Asia.