Transcript: A video case study on Burra Foods

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>>Grant Caruthers: I’m Grant Caruthers. I’m the CEO of Burra Foods. We’re a dairy processor in Gippsland, Victoria.

Burra Foods is a collector of raw milk off farm and we process it into powdered milk, infant formula, cheese and other dairy products.

Victoria is very good at regional processing of food products, particularly dairy products. All the action is in Korumburra, which is in South Gippsland, 120 kilometres away. That is the area of excellence for growing and collecting milk and processing it.

We are a customised ingredient company. So we will work intimately with the technical team of our customer to tailor a product, an ingredient for their application.

In Japan we’ve been able to develop some ingredients that work very well with some manufacturers in the beverage industry and the yoghurt and ice-cream industry. It is a big importer of dairy products until China came along, the biggest importer of dairy products in the world.

For Burra Foods’ export business, the real hero is the Chinese Free Trade Agreement. The China market is so big you really can’t get your mind around it. They want dairy, they want dairy protein in their diet and they’re increasingly being able to afford it.

Burra’s China strategy is all about infant formula, which was triggered by the tariff reductions that we saw in 2012 and the Free Trade Agreement that is to be signed, hopefully in 2015.

We currently pay between 10 and 20 per cent tariff on all products and that will edge down. The agenda’s been set and being on the ground in a market has given us a great dividend. We’ve done it in Japan, we had an office established in 1999, and we’ve decided to do the same in China.

The FTA for the dairy industry is a clear way forward to effectively a zero tariff provider of food into the world’s biggest food market.

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