AACo abattoir to offer trade option

WA's northern pastoralists will have an alternative market to the live export trade when the Australian Agricultural Company (AACo) builds its $83 million abattoir south of Darwin.

Last week AACo paid $13.3 million for a 600-hectare site at Livingstone Farm, 50km south of Darwin, to set up its Northern Australian Beef plant.

Company Northern Territory general manager Stewart Cruden said AACo would use about 14ha of the land for the abattoir, which would be the biggest beef processor in the NT. The rest of the property would be used as a buffer zone.

He said the aim was to start construction of the facility, which would have capacity for 1000 head a day, in August-September after final approvals were granted. It was expected to be operational by June 2013.

It is understood AACo was prepared to invest 100 per cent of the required capital to build the abattoir but could seek investment partners.

The group has indicated it would own at least half the company developing the facility but the proposal required sign-off from the AACo board.

Mr Cruden said the abattoir could take cattle from the north of WA, especially from the East Kimberley region.

"We expect WA cattlemen will analyse the cost savings of sending stock to us compared to sending them south," he said.

"We think it will be a viable option for WA pastoralists from as far west as Broome to truck to our facility."

Mr Cruden said AACo would not compete with the live export trade but focus primarily on processing heavier cattle and older cows that did not meet live export specifications. It would also process some prime younger cattle and comply with halal standards.

He said there were markets for boxed beef, hides and rendered products from these types of cattle in nearby markets in Asia and the US. AACo also had the ability to sell into the European Union.

When fully commissioned, Northern Australian Beef would process about 225,000 head of cattle a year and Mr Cruden said he expected about 40 per cent would be directly supplied by AACo's pastoral operations and the rest from other stations.

AACo operates 19 cattle stations, two feedlots and three farms in the NT, Queensland and WA, spanning more than 7.2 million hectares, or about one per cent of Australia's land mass.

"The Darwin plant will be filling a gap for meat processing across the whole far north of WA, the NT and parts of Queensland," Mr Cruden said.

"It will reduce the need for long distance transport of animals and improve carbon, welfare and productivity outcomes for the northern beef industry."

He said AACo planned to halve the number of cattle trucked to Queensland or southern abattoirs when the Northern Australian Beef facility was up and running.

Northern WA cattle producers have not had easy access to an abattoir since the Broome Meatworks closed in 1994.

A pre-feasibility study into a northern WA beef abattoir late last year concluded that an abattoir near Broome could be viable but would need some government support due to seasonality, workforce and transport cost factors.

Broome pastoralist Jack Burton is understood to be commissioning a small beef processing plant on Kilto station, 70km out of town, with capacity for up to 10 head of cattle/day.

It is understood he also plans to establish a bigger processing facility on Yeeda station in the shire of Derby-West Kimberley by mid-2013 that could handle up to 300 head/day.

Pastoralists and Graziers Association Kimberley division vice-chairman David Stoate said development of beef processing facilities for northern pastoralists was welcome.

He said the AACo plant could provide advantages for about 40 pastoralists in the East Kimberley, with trucking distances much shorter to Darwin than to southern WA abattoirs.

"From Kununurra it would be about 800km to Darwin, compared to about 3000km transporting stock to south of Perth," he said.

"Anyone east of Broome would be closer to the Darwin facility than to WA processing plants in the south."

Mr Stoate said the AACo facility would provide a much needed market for heavier cattle above 350kg that could no longer be shipped live to Indonesia and older females.

"The weight restriction Indonesia introduced two years ago had a big impact on us before we were hit by the live export ban last year," he said. "Any development of alternative markets for our cattle is positive."

Mr Stoate said northern pastoralists were concerned about export quota levels for the Indonesian market next month but it seemed shipping activity to the Middle East was picking up.