Wellard’s slow boat to China finally sets sail
Wellard says this week's "trial" sea-bound live cattle shipment to China is set to be followed by smaller consignments in the short term
Australia’s second beef cattle shipment to China is on the water following the long-anticipated departure of Wellard’s first consignment of 2000 steers from Victoria this week.
The Angus and Angus-cross cattle were loaded at Portland, destined for Shidao in China’s Shandong Province.
They will be processed by the Rongchen HCMH Trade and Service company, a subsidiary of major fresh and processed food business, Tai Xiang Group.
Although its live export move into the China market has been flagged for almost three years, Wellard has only described this week’s shipment as a “trial”.
Early this year Elders’ then subsidiary, the North Australia Cattle Company, facilitated Australia’s first live cattle sea-bound consignment of 1500 head to China following earlier air shipment trials by Elders and Ruralco.
Wellard has a strong live export history with Chinese buyers, supplying dairy and beef breeders as well as air freighting breeding sheep in the past.
It announced intentions to send its first shipment of beef cattle for processing about a year ago.
Like February’s Elders shipment, Wellard sourced the stock from South Australia and Victoria.
Executive director of operations, Fred Troncone, said Wellard had been “very careful” to make sure the first consignment was managed professionally with quality cattle.
“We want to make this trial an absolute success so we can develop a more regular trade, grow our cattle exports to China and increase our vessel utilisation,” he said.
The move to a more regular live export trade would also send a strong signal to southern cattle producers about an enduring demand for quality livestock from the boat trade.
Mr Troncone said smaller shipments would dominate the initial live cattle trade between the two countries in the short term, but it had capacity to increase significantly as the commercial landscape rebalanced.
The past two years’ bullish cattle prices in Australian cattle have dampened development of a the Chinese export trade, and eroded Wellard’s export activity from its northern Australian ports, too, leaving the company struggling with reduced earnings, surplus shipping capacity and big debt issues.
The company’s beleaguered share price responded, slightly positively to the news, jumping from 12 cents a share to 14c, after months of depressed activity and lows at 10c in September – down its best 2017 price of 26c in March.
In China Wellard’s general manager, Bernie Brosnan, said the vast support network which had made the aggregation of cattle for the company’s first Chinese shipment so successful deserved credit.
He said in addition to the price competition the Wellard consignment had added to the Australian livestock market, the new export trade would benefit service providers including stock agents, truck operators, veterinarians, wharf and shipping industry workers and others in Australia, and China.