‘China backing pastoral vision’
The following article was written by Paige Taylor and was reported in The Australian newspaper today on the 26/05/2014.
See: http://www.theaustralian.com.au/business/china-backing-pastoral-vision/story-e6frg8zx-1226931107552
Bohemia Downs station manager Alan Lawford. Picture Colin Murty. Source: NewsCorp Australia.
TEN of Australia’s biggest Aboriginal-run pastoral stations are preparing for a Chinese-backed merger that aims to reverse their economic fortunes using world-class breeding, management and feed-crop technology.
The Aboriginal Pastoral Co-op will begin as a commercial consortium of five cattle stations in the Kimberley that have struggled in isolation to achieve good prices.
Though debt-free, the stations in the first phase of the proposed co-op have never turned big profits and are too small on their own to leverage good economies of scale or manage supply chain costs.
Elders in the region are disappointed the stations many of them grew up on do not have the ability to employ larger numbers of young Aboriginal people.
The consortium could have up to $40 million of Chinese investment through investment house ASF Group. The firm’s director, Geoff Baker, said the ASF Group had access to finance in mainland China, Hong Kong and other parts of Asia that could help the co-op get the most from its cattle stations.
“The Chinese believe Australia is awash with resources, agricultural products and cattle — it doesn’t take much convincing of those opportunities,” he said.
He said the ASF Group had a healthy relationship with traditional owners, many of whom have Native Title over land in the region as well as strong connections to pastoral stations.
“We want to have a good relationship with traditional owners,” Mr Baker said.
ASF Group saw “enormous potential” in the co-op concept, not least because the Kimberley was a lot closer to Asia than states such as Victoria and NSW.
ASF Group, which is already active in the Kimberley with exploration projects, is in talks with the Aboriginal Charitable Trust putting the consortium together, KRED Enterprises.
Under the long-term plan, ASF Group’s investment could help create infrastructure and irrigation systems to support 16,000 head of cattle in a Kimberley corridor. Ultimately mustering costs would be reduced by 25 per cent, according to a co-op concept plan.
The consortium would market its own brand of organic Kimberley rangeland beef for export to China. The concept for the consortium has the support of Agriculture Minister Barnaby Joyce.
The Abbott government has honoured a commitment by the Rudd government to contribute $400,000 towards the setting up of the consortium in the form of a grant to KRED.
Bohemia Station manager Alan “Doodie” Lawford said he wanted to help reinvigorate the industry because that would mean more jobs on the land for young Aborigines.
“Our young people want to be out here,” he said.
Indigenous Business Australia is preparing the business and marketing plans for the co-op.
So far, 10 cattle stations have asked to join. If the consortium begins well, more members would be welcome, including cattle stations in other regions and states, and those owned by non-Aboriginal interests.
KRED chief executive Wayne Bergmann said Aboriginal-run pastoral stations had suffered the same setbacks over the years as the ones felt industry-wide, including the crippling effects of Labor’s live export suspension.
Costs have spiralled, but the price per head has been virtually unchanged for 18 years.
Mr Bergmann said he believed there were extraordinary opportunities for a co-op with strong management. The consortium was dreaming big.
“I see it like the early days of Wesfarmers, where farmers got together collectively and had a management team to deal with challenges nationally,” he said.
The above article was written by Paige Taylor and was reported in The Australian newspaper today on the 26/05/2014.
See: http://www.theaustralian.com.au/business/china-backing-pastoral-vision/story-e6frg8zx-1226931107552