THREE months of civil construction works are about to start on Australian Agricultural Company's (AACo) long-promised abattoir south of Darwin, with the company confident about the plant's benefits for northern Australia's beef industry.
However the company is still looking to lock in a third party equity investor to help bankroll the $85m project.
AACo managing director David Farley was upbeat about the future of Aussie beef on the global stage when he announced the initial construction works at the Australian Livestock and Property Agents Association (ALPA) Conference in Brisbane.
But he was also quick to point out to agents that the abattoir would not be focused on processing prime northern cattle and would not undermine the live beef export trade.
"This is not about stopping the live export trade - not at all," he said.
"It's about making our breeding herd more efficient in the north.
"It's about commercialising the old age end of the herd, not about slaughtering 100-day-old cattle.
"We've budgeted on 216 kilograms per carcase weight for the Brahman cattle.
"It's all about getting productivity back at the station level.
"Once we get productivity back at the station level it will improve profitability in the underlying asset lines."
The new plant, which is expected to be commissioned in about a year, would be built as a hot boning facility, but with flexibility to incorporate chillers for some prime cattle processing when required.
Mr Farley said there had already been a big investment committed to the project and a project manager and principal contractors were now being appointed.
Civil earthworks were expected to be completed within 12 weeks.
The plant will have capacity to handle up to 225,000 head a year, with throughput likely to be up to 200,000 cattle a year once full production levels are achieved.
Mr Farley estimated the meatworks would create 260 direct and a further 530 indirect jobs, including substantial new opportunities for indigenous and female workers in the region.
"It will inject $126 million a year into the local economy," he said.
AACo is viewing its move into meat processing in the Northern Territory as a significant milestone for the company and a natural step towards vertical integration to take advantage of growing nearby Asian markets for red meat.
The company was involved in talks with a number of potential investors who had expressed interest in the project, but also had access to internal capital sources if no deal was reached with another potential financial backer.
Australian Financial Review
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