Australia welcomes major Vietnamese beef investment

15-Dec-2016 - Last updated on 15-Dec-2016 at 12:46 GMT

Australia's Northern Territory covers about one sixth of the country and is a key cattle hub

Related tags Investment Meat International trade Beef Livestock

Meat & Livestock Australia (MLA) has welcomed the first large-scale Vietnamese agricultural investment in the country – the purchase of an AU$18 million ($13.6m) cattle station by An Vien Pastoral Holding and Agriculture Company in the Northern Territory.

The chairman of holding company the An Vien Media Group, Pham Nhat Vu, was the official buyer of the Vermelha station, Larrimah, south of Katherine.

Commenting, an MLA spokesperson said: “When you see high-net-wealth individuals and global corporations making beef investments in Australia, it shows confidence in the Australian beef industry and gives confidence that they believe in the consumption of red meat globally is strong.” The station has 200,000 hectares and 10,000 Brahman cows.

An Vien did not respond to requests for comments on the deal by GlobalMeatNews, but a Vietnamese cattleman commented to the Vietnamese language VietnamNet online publication: “It is very difficult in Vietnam to get a land plot of 100 hectares to organise agricultural production. There are many cattle farms in Australia, which cover thousands of hectares each,” he said, noting that while Australian taxes were high compared to those in Vietnam, weather and market conditions were favourable and even a comparatively small AU$5m investment could provide a good yield.

Firms seeking investment

And while Vietnam is better known for receiving foreign direct investment (FDI) rather than providing it, in recent years, Vietnamese firms have been looking to invest in many countries, from Laos to Russia, and Australia. A spokesperson for the Australian Trade and Investment Commission (Austrade) said: “In 2015, Vietnamese investment into Australia was AU$468m ($348m), and Australian investment into Vietnam was AU$1.457bn ($1bn).”

Vietnam also has a growing taste for beef, and Vietnamese ranchers in Australia could target their home market. The MLA spokesperson said there had been an exponential growth in the number of cattle imported from Australia to Vietnam, with a peak in 2015 of 360,000 head, and the association forecast that 200,000 head of cattle would be imported live into Vietnam from Australia in 2017.

Such trades are partly fuelled by free trade – live exports from Australia to Vietnam have a zero percent tariff. The Austrade spokesperson said that the Vietnamese government considers live cattle as a useful input that can have added value within Vietnam through slaughtering and processing.

At this point it is not known whether the cattle from Vermelha will be exported to Vietnam, but with beef consumption currently at 2.5 kilograms per person per year in a nation of some 95 million people, the MLA said this low level of consumption was expected to grow.