Zhenhai sets out strong 2018 ambitions

After 10 days at sea, 1,600 cattle arrived into Ningbo Zhoushan port in the province of Zhejiang.

The cattle are the first of 100,000 cattle set to be imported in 2018 by Zhejiang Yi Heng Mu Ye Co, which operates the Heng Niu meat brand. The firm has already sold “significant amounts”​ of beef through online pre-orders. Online sales could prove convenient for Yi Heng, given that Ningbo is located in the same province as affluent cities like Hangzhou and Suzhou, and is also located near Shanghai.

The cattle will have to be slaughtered within 14 days, according to rules set by Chinese quarantine codes. Local media ran photos of the cattle being taken down the gangways off the ship and on to blue shipping containers (with windows and emblazoned with ‘Australia live cattle’ in Mandarin on the sides) atop flatbed trucks. The cattle, which appear to be brown-haired Brahman-type cattle, were offloaded at quarantine and bonded slaughtering facilities purpose-built for the live cattle trade in the Zhenhai sub-region of Ningbo.

Zhenhai aims to handle 100,000 cattle per year under a national licence granted to 12 Chinese ports to each handle a maximum 100,000 live cattle per year from Australia. Those licences were announced in 2016, with Ningbo the only port in the wealthy province of Zhejiang to get the nod.

Chinese authorities have made much of the extra jobs and value added by the imports of live cattle for slaughter. However, the meat will be 20% more expensive than local fresh meat according to Yi Heng, which pointed to logistics costs. Chinese tariffs on live cattle from Australia (which has a free trade deal with China) will be phased out to zero in 2019. 

Australian beef fetches a premium price compared to domestic product, explained Dong Jun Hai, Yi Heng’s chief executive who briefed local media at the port. He added that the firm was processing the beef according to cuts for domestic cooking styles, with dicing to suit traditional Chinese dishes and hot pots.

Yi Heng has some way to go to fill its capacity, however, given the firm claimed to have stabling and processing capacity for 12,500 cattle at any time. Meanwhile, it has signed a distribution deal with leading local logistics firm Shunfeng to distribute online orders in the cold chain across eastern China.     

Before entering beef processing and distribution, Yi Heng had experience in breeding lamb, pigs and poultry. However, the firm has competition for the lucrative Shanghai beef market: late last year Australia-based Elders Co sent its first shipment of slaughter-ready Angus cattle to Baozhu Food Co, a subsidiary of the Tai Xiang Group, which supplies Shanghai caterers. The cattle were shipped to Shidao port near Shanghai, where they were slaughtered at a Baozhu-run plant.

Local authorities have appeared nervous about any possible imports of disease with the live cattle. , On signing a memorandum of understanding with the provincial agriculture ministry on live imports last year, Jinhong Yang, head of the local General Administration of Quality Supervision, Inspection & Quarantine (AQSIQ) office in Ningbo, warned that whole shipments of cattle would be destroyed if disease showed up.

In 2017, China was the world’s second-largest producer of beef in carcase weight: 7.8 million tons compared to Australia’s 2.12 million tons. However, China was also the world’s top importer of beef last year, at 925,000 tons, ahead of second-placed Japan on 780,000 tons.