Australian food safety record attracts Korean food giant
July 2011
The Australian food industry has long been recognised as one of the world’s best for food safety and food quality. That same reputation is attracting the world’s leading food production companies to invest in the Australian market.
CJ Corporation is a leading food company in the Republic of Korea, producing products including sugar, flour, seasoning, stock feed and dairy, and it employs more than 4,900 people in 16 countries.
An important product within its range is a line of beef seasoning products that enhance the flavour of many popular dishes. However, in recent years, production has been severely impacted by disease outbreaks within the global beef industry. Spates of foot-and-mouth and BSE (bovine spongiform encephalopathy, or ‘mad cow’ disease) have seen beef products from some markets banned in Korea, severely limiting the locations from which these products can be sourced.
CJ Corporation had begun production of beef-based ingredients for beef seasoning from a plant in the US in 1997, but incidences of BSE in that market in 2003 led to the Republic of Korea banning the importation of US beef products.
That ruling led CJ Corporation to conduct a worldwide search for a suitable disease-free location for a new production facility. By 2004 it had found its ideal location – Australia – and in 2006 the subsidiary company CJ NutraCon was born.
Australia’s clean and green appeal
According to CJ NutraCon’s managing director, Mr Jay Jeong, Australia is a very sensible location for manufacturing beef products.
“We discovered Australia was one of very few countries in the world that is BSE-free,” Mr Jeong says.
In 2006, CJ NutraCon commenced construction of a A$27 million production facility near the Queensland city of Toowoomba, with production commencing the following year. Mr Jeong says the Toowoomba City Council was supportive of the facility and assisted in its rapid development.
The facility’s location in rural Queensland is in close proximity to Australian beef producers and is situated in one of Australia’s top food producing regions, the Darling Downs. The region’s transport infrastructure also provides CJ NutraCon with easy access to coastal ports.
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CJ NutraCon's Toowoomba facility.
Image courtesy of CJ NutraCon.
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The facility takes high-quality 100 per cent Australian beef and beef leg bones and uses them to manufacture enzyme hydrolysed beef extract, beef leg bone extract and other extract products. These materials are then exported to the Republic of Korea where they are processed into beef seasoning. A smaller portion of the facility’s output is also exported to China.
Jeong says Australia’s strict quarantine regulations and management of its agricultural industry meant that his company could be comfortable in making such a large investment in the country.
“We have confidence that it is unlikely our company will encounter problems in Australia that have affected the beef industry in other parts of the world,” he says.
“Australia has very detailed animal disease regulations and management, allowing Australia to be better protected from disease for longer.”
Jeong added the company receives regular updates from the Australian Quarantine Inspection Service (AQIS) relating to food safety.
Australia’s reputation for food safety has also assisted CJ NutraCon in building consumer confidence in its home market.
“It is well known that Australia has a clean environment, and this is important for us to ensure our products are fresh and of the best quality.”
Today the Toowoomba facility employs 22 staff and operates around the clock to produce 2,000 metric tonnes of beef seasoning each year. CJ NutraCon employs two Australian food safety technicians, among other staff, and the facility houses a food quality laboratory to ensure that products meet the company’s own strict standards. Current sales from the plant total A$15 million annually, and it is proving to be an increasingly profitable venture.
Jeong says that in addition to the benefit of Australia’s BSE-free beef industry, he has been impressed by the quality of Australia’s transport infrastructure and the high standard of training within the workforce that CJ NutraCon has employed, particularly their dedication to a safe working environment and food safety standards.
Future prospects abound
The success of the Toowoomba facility has led CJ NutraCon to commence planning a A$5 million expansion, adding an additional 25 per cent of annual production capability within the next two years. The company has already added four additional staff in preparation for the expansion.
Jeong says the company is investigating broadening output from the facility to include other product categories, including ingredients made from pork and chicken bones.
The company also has plans to export products from Toowoomba into the US, Japan and Taiwan, as well as supplying the Australian market.
Setting up in Australia
The Australian Government began working with CJ Corporation in the lead-up to the company’s investment in Australia, providing it with information on the local business environment and relevant Australian industry sectors and regulation. Austrade continues to work with CJ NutraCon through its TradeStart partner, Trade & Investment Queensland, to help the company capture increased export opportunities and expand its local operations.
Mr Jeong says the company’s rapid entry into Australia was also assisted by the Queensland Government, which has since provided additional funding for staff training.
With the facility having achieved profitability and being prepared for expansion, the future looks bright for CJ NutraCon in Australia.
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