Transcript: A video case study on Aaco Beef
>>Voiceover: Beef is among Australia’s top 10 export commodities, worth $6.4 billion.
North Asia is one of Australia’s largest and fastest-growing markets, where the quality and distinctive flavour of our farmers’ beef is highly valued by consumers with an appetite for premium products.
The free trade agreements with China, Japan and Korea are set to significantly enhance export opportunities to these key markets.
The elimination of tariffs will provide Australian producers with a strong advantage over key competitors, resulting in improved returns for Aussie farmers.
The Australian Agricultural Company is more than ready to make the most of these opportunities.
>>Ben Carter: My name’s Ben Carter. I’m the Sales and Marketing Manager here at Australian Agricultural Company.
Australian Agricultural Company is the largest vertically integrated livestock producer here in Australia.
AACo own two of their own feedlots. We have over seven million hectares of grazing land. We have over 500,000 head of cattle and our plan is to produce some of the highest quality beef, from grass-fed beef, grain-fed beef and Wagyu beef and exporting that all around the world as well as into the domestic market here in Australia.
Our Livingstone facility was commissioned in September 2014. It’s about 50km south of Darwin. We employ around about 130 people there at the moment.
We export to about 33 different countries around the world with our main countries being Korea, Japan, the US, the Middle East, Europe and China and this is going to continue to grow for us as we grow our production systems and grow the opportunities through our northern plant as well.
>>Voiceover: Thanks to the powerful trifecta of free trade agreements, the prospects for our beef exports have never been better. There will be no tariff on Australian beef exports to Korea and China, while the tariff on beef exports to Japan will be significantly reduced.
Japan is Australia’s largest market for beef, worth $1.4 billion. Beef exports to Japan have already jumped by 84 per cent since the Japan Agreement entered into force.
>>Ben Carter: We are now ahead as far as the duty component to one of our biggest competitors in the market. So that way right now we’re actually ahead of that and we hope that we can continue.
>>Voiceover: AACo has doubled the size of its market in Japan in the last couple of years and expects the Japan Agreement to help the company to keep growing.
Korea is a key export market for Australian beef, worth almost $900 million.
In the six months since the free trade agreement with Korea came into force, exports of frozen beef prime cuts to Korea increased by 26 per cent.
>>Ben Carter: Our business in Korea, which is our largest country of exports, so obviously very important to us, we did between $40 and $50 million worth of beef sales last year, and we do expect to see that grow anywhere from 15 to 20, 25 per cent year on year, and the FTA obviously will help with that to be ensuring that we’re ahead of the game and keep those trade barriers down.
>>Voiceover: The tariff cuts secured under the China Agreement allow Australia to strengthen our position as China’s preferred supplier of high-quality beef.
>>Ben Carter: We’re constantly seeing growing interest from the China market. We are in that high-quality market segment with the beef that we’re putting in there. A lot of the beef that will be going in there is really that commodity-style product and obviously with our Darwin facility this product will allow us to actually have greater access of the lot variety of beef going into China than we have at the moment. So that will actually give us some greater growth opportunities.
>>Voiceover: The three North Asian free trade agreements mean the future certainly looks bright for Australian Agricultural Company, which employs a substantial workforce across the north of Australia.
>>Ben Carter: So we’re feeling really positive about the future in the key markets of Korea, Japan and China and they’re a massive focus for us as a company. They’re within our top five and we will continue to really put a lot of focus in there and be watching very carefully on how we can expand our business into these markets.
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