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Emerging beef supply chains in Asia

NBF project brief & ‘The road to Thailand’

Daniel Marshall Northern Beef Futures, Manager Agribusiness and Investment Development

Department of Agriculture and Food, WA

Perth 22 February 2016

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Content

1. DAFWA-NBF project background and brief

2. DAFWA-NBF ‘The road to Thailand’

3. AEC ‘Thailand pre-feasibility study’ focus points

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Northern Beef Futures Project

• Department of Agriculture and Food WA (DAFWA) – NBF funded by Royalties for

Regions - $15M (AUD) project over 5 years

• Working within supply chains at enterprise level to support:

• Economic growth - promote integrated supply chains from production through

to processing, marketing and distribution to export markets

• WA beef industry in order to attract transformational and innovative

investment

• Why was NBF developed?

• To promote and grow market diversification

• Increase productivity and grow value of WA northern beef sector

• To encourage and support new business, investment and finance models

• To respond and capitalise on forecast growth in beef demand (as

forecast by Director General, Dr Brad and ANZ Research)

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Macro Demand Trends

• Macro trends driving beef demand & investment

• Urbanisation 2010 inflection point (global) rural > urban

• Population growth > switch from plant to animal protein > 2050 forecast 9 billion

• Consumer shift from traditional (wet) to retail hyper market purchasing

• Demographics > growth of middle class consumption

Source: ABARES, Baume

World annual agrifood demand by region - 2050

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NBF seven sub-projects

NBF project focus on implementing the following seven sub-projects and respective action

plans to get to the ‘contracted outcomes’:

1. New markets and new supply chains (China, Vietnam, Thailand, Cambodia)

2. Supply chain development (North/South integration, backgrounding model)

3. Investment and capital (supply chain finance, wire, water, technology)

4. Capacity and leadership (Kimberley Pilbara Cattlemen’s Association)

5. Mosaic agricultural opportunities (irrigated and dryland fodder, weed risk)

6. Industry infrastructure Development (review, biosecurity yards, roads etc)

7. Practice change and capability development (herd productivity and business improvement)

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NBF and the road to Thailand Holiday to Thailand?

Oct 2013: Agribusiness Trade Mission to Thailand

Nov 2014: NBF project formally commences

Dec 2014: Approved formal health protocols for feeder and slaughter cattle

Dec 2014: Agribusiness Trade Mission to Thailand

Jul 2015: DAFWA NBF and Thailand ‘Letter of Cooperation’ (Ministry of

Agriculture and Cooperative)

Oct 2015: Reverse supply chain delegation from Thailand to WA (Kimberley)

Jan 2016: Pre-feasibility study ‘supply chain models for WA in Thailand’

Feb 2016: DAFWA NBF and Thailand BOI seminar

2016++ Commercial sustainable integrated supply chain

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The NBF Egg Principle and Thailand

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NBF goals

The NBF project ‘holy grail’ is for diverse integrated beef/cattle

supply chains that contain bilateral co-investment across the

entire supply chain.

Profitable, enduring, innovative and robust supply chains that

withstand external factors including currency, political policy,

market shocks and changing market preferences.

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Innovation a point to remember ‘Profitable, enduring, innovative and robust supply chains’

“It ought to be remembered that there is nothing more difficult

to take in hand, more perilous to conduct, or more uncertain in

it’s success, than to take the lead in the introduction of a new

order of things. Because the innovator has for enemies all

those who have done well under the old conditions, and

lukewarm defenders among those who may do well under the

new.

Machiavelli, The Prince

But, “Change is the only constant” and “fortune favours

the brave”

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Why Thailand

>60million population

>AEC effective 2016 access to 600million people

>20million annual tourists per annum (Chinese)

>Strategic location within Asia

>Regional trade access agreements plus TAFTA

>A range of markets for beef and co/by products

>Premium supermarkets are world class and top Perth

>Good people to do business with and value relationships

>World class food manufacturing standards

>Commitment to future infrastructure investment

>Supportive government policies

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Pre-feasibility study Thailand – Key Points >NOT prescriptive

>NBF is seeking to stimulate the pathway to integrated supply

chains.

>WA beef has potential to co-invest and provide base supply

>Catalyst for new models of supply chain integration

>WA Producers are critical

>WA producers have an opportunity to get closer to consumer

>Collaboration and co-ordination investment opportunity

DAFWA-NBF and the WA beef industry will support ‘your’

idea’s, deal creativity and imagination to convert and

implement new business models.

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Thank you

Important disclaimer

The Chief Executive Officer of the Department of Agriculture and Food and the State of Western Australia accept no liability

whatsoever by reason of negligence or otherwise arising from the use or release of this information or any part of it.

Copyright © Western Australian Agricultural Authority, 2015