LIV­ING IN HAR­MONY

Countryman - - FRONT PAGE - Rueben Hale

A York feed­lot is be­ing set up as the tech­no­log­i­cal hub of Aus­tralian-run Har­mony Agri­cul­ture and Food Com­pany’s plans to build an in­te­grated sup­ply chain for live an­i­mals and frozen and chilled beef.

Har­mony re­cently in­creased its sup­ply foot­print in China af­ter the ac­qui­si­tion by its ma­jor­ity share­holder Dalian Hesh­eng Hold­ings of the pre­mier food brand Qing­dao Snow­dragon, which owns a quar­an­tine and feed­lot fa­cil­ity and two abat­toirs in Qing­dao.

In Au­gust, Har­mony also launched Tau­rindi Beef, its first branded prod­uct for both do­mes­tic and in­ter­na­tional mar­kets.

Har­mony chief ex­ec­u­tive Steve Meer­wald said the bur­geon­ing Chi­nese mar­ket, other mar­ket ad­vance­ments in Ja­pan and Korea, and an op­por­tu­nity to build a sheep en­ter­prise to ri­val its cat­tle busi­ness, were key rea­sons for the com­pany’s am­bi­tions.

The group is plan­ning to sell up to 120,000 head of live­stock per year by 2018. It has ex­pe­dited works for a state-of-the-art sheep feed­lot, graz­ing and quar­an­tine fa­cil­ity at the re­cently pur­chased Koomar­lin prop­erty in York, which adds to Har­mony’s 1030ha WestBeef prop­erty at Kalan­nie, 1600ha Ran­cho East at Esper­ance, and 5908ha Mt Fyans in Vic­to­ria.

Mr Meer­wald said the prop­erty would be the cen­tre of Har­mony’s new busi­ness model, which sought to en­gage with pro­duc­ers, back­grounders, feed­ers, trans­porters, and pro­ces­sors to pro­vide sup­ply chain man­age­ment and data an­a­lyt­ics.

“We will look at all op­por­tu­ni­ties to se­cure stock for our in­te­grated sup­ply chain,” he said.

“Our busi­ness re­lies on hav­ing good re­la­tion­ships with our ven­dors for the busi­ness model to suc­ceed.

“We are not sig­nif­i­cant pro­duc­ers of stock, and it is not re­ally one of our strengths. But we do have and want to con­tinue to de­velop re­la­tion­ships with cat­tle and sheep farm­ers.

“The re­la­tion­ship can be ad­van­ta­geous for pro­duc­ers seek­ing feed­back and in­for­ma­tion about the pro­duc­tiv­ity of their an­i­mals once they leave their prop­erty and en­ter our sup­ply chain.

“We al­ready have some key col­lab­o­ra­tions like that on the cat­tle side of the en­ter­prise and will be look­ing to mir­ror that strat­egy on the sheep side.”

Mr Meer­wald said there was an op­por­tu­nity for the Har­mony busi­ness model to help achieve ef­fi­ciency div­i­dends for all the play­ers in the live­stock sup­ply chain.

“To make those gains we have to do busi­ness smarter, bet­ter and faster and draw out ef­fi­cien­cies,” he said.

“That is more eas­ily said than done. To in­te­grate the sup­ply chain and make it fo­cused to­wards an end-user prod­uct, rather than it be­ing seg­mented with many par­tic­i­pants all do­ing what suits them, but not nec­es­sar­ily what is the best in­ter­ests of pro­duc­ing a high-qual­ity and highly com­pet­i­tive end prod­uct.

“Our aim, in the end, is to prove our busi­ness model that achieves those ob­jec­tives. The busi­ness is fo­cused on data and anal­y­sis to en­sure that we ex­tract as much in­for­ma­tion as pos­si­ble to make bet­ter de­ci­sions and re­fine the farm-to-mar­ket process.”

Mr Meer­wald said Koomar­lin was cho­sen be­cause of its cen­tral prox­im­ity to live­stock coun­try, as well as its close lo­cal­ity to Perth city.

“We want to work in col­lab­o­ra­tion with De­part­ment of Pri­mary In­dus­tries and Re­gional De­vel­op­ment, Mur­doch Univer­sity and the Univer­sity of West­ern Aus­tralia, along with other in­sti­tu­tions,” he said.

“It would also pro­vide easy ac­cess for stu­dents do­ing agricul-

tu­ral sci­ence and other as­so­ci­ated dis­ci­plines to ob­tain on-farm prac­ti­cal knowl­edge.

“The farm will also be a sheep feed­ing and trad­ing en­ter­prise. It will be set up pri­mar­ily for the do­mes­tic mar­ket, but also as a pre-quar­an­tine fa­cil­ity as those op­por­tu­ni­ties oc­cur.”

Mr Meer­wald said the busi­ness model was geared to en­cour­age farm­ers to in­crease sheep num­bers in a chal­leng­ing mar­ket.

“There is enor­mous scope for the State’s sheep in­dus­try to make its sup­ply chain more or­derly,” Mr Meer­wald said.

“Cur­rently there is pres­sure on sheep num­bers, which means that qual­ity sheep will be more dif­fi­cult to source out of sea­son.

“The en­ter­prise will of­fer a way of en­sur­ing we can fa­cil­i­tate a reg­u­lar sup­ply of stock.

“At the mo­ment we are also study­ing the fea­si­bil­ity of in­creas­ing our in­volve­ment in sheep pro­duc­tion, to de­velop the sheep side of the busi­ness to at least equal the value of the beef en­ter­prise.”

Mr Meer­wald said ac­cess­ing sheep num­bers re­mained a chal­lenge in the short term.

“We would be look­ing for most of our sup­ply to be sourced ini­tially from farms in WA and will ex­pand into the Eastern States,” he said. “There is scope for ex­pan­sion of the State flock, and there are ini­tia­tives in place for that to hap­pen. But it needs to be done with a view of some scale to meet in­creas­ing de­mand from lo­cal and ex­port mar­kets for sheep meat.

“The op­por­tu­nity here is there is a cur­rent deficit in num­bers around Aus­tralia, as well as in­ter­na­tion­ally.

“That’s why I see it as an op­por­tu­nity in the fu­ture for in­vest­ment and growth in the lo­cal sheep in­dus­try for meat and wool.”

Mr Meer­wald said the south­ern range­land was an area that should be pro­duc­ing sig­nif­i­cant num­bers of sheep again.

“There is a sig­nif­i­cant risk for pro­duc­ers in that area be­cause of wild dogs, but as the value of sheep grows that un­der­utilised coun­try is com­par­a­tively cheap,” he said.

“Peo­ple will look at it more and more as a vi­able propo­si­tion, but the wild dog prob­lem needs to be tack­led to ad­dress the com­mer­cial and wel­fare risk as­so­ci­ated with the prob­lem.”

Mr Meer­wald said the com­pany had plans for ex­pan­sion once its busi­ness model proof of con­cept had been achieved.

“We’re fo­cused on con­sol­i­dat­ing our cur­rent as­sets and ev­i­denc­ing the ef­fi­cien­cies of our model,” he said. “We don’t have any plans to pur­chase more pro­duc­tion as­sets at the mo­ment, and it is pos­si­ble the busi­ness will ex­pand in the fu­ture by leas­ing farm­land and en­ter­ing into joint-ven­ture part­ner­ships with other com­pa­nies.

“Our scale of live­stock prod­uct vol­ume and in­ven­tory we have in our sys­tem is prob­a­bly a bet­ter use of our work­ing cap­i­tal lines and eq­uity funds at our dis­posal.”

Pic­ture: Danella Be­vis Photo avail­able at west­pix.com.au

Har­mony Agri­cul­ture and Food Com­pany west­ern op­er­a­tions man­ager Ivan Rogers, chief ex­ec­u­tive of­fi­cer Steve Meer­wald, and strat­egy and busi­ness de­vel­op­ment di­rec­tor Richard Pearce at Koomar­lin.

Pic­ture: Danella Be­vis Photo avail­able at west­pix.com.au

Har­mony Agri­cul­ture and Food Comapny man­ager west­ern op­er­a­tions Ivan Rogers with Dor­pers at Koomar­lin.

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