A NEW joint venture between V&V Walsh, China's Grand Farm and the Inner Mongolian government will significantly boost Western Australia's meat and fodder exports to China and pour hundreds of millions of dollars into the local economy.
In teaming up with China's largest lamb importer in a billion dollar deal, the state's largest meat processor will send half a million more lambs through the Bunbury-based abattoir.
It means struggling WA livestock producers of cattle and sheep could expect a massive new market opening up before the end of the year.
V&V Walsh has unveiled a billion dollar deal with a major Chinese meat importer and retailer which it says will create a huge demand, as well as a challenge for farmers to produce the numbers.
The company has entered into a joint venture with one of China's largest red meat importers, Grand Farm Group, an investment that will be spread over five years in which Walsh will process an extra 30,000 cattle and 50,000 lambs per year.
This will include $200 million of Chinese investment into WA to increase beef and lamb production and processing facilities to improve the facilities at Walsh and $800 million into inner Mongolia where there are plans to develop state of the art feed lots, a research and development centre, plus processing facilities and an expansive network of feed lots.
Walshes chief executive Peter Walsh said they were in the process of gaining a licence to export WA meat to China and as soon as that came through they would be ready to go.
"The groundwork in China has already commenced," Mr Walsh said.
"This investment works both ways. Hopefully we will be at the final stages of building by September and the licence should be approved by the Chinese Government around this time. As soon as that happens, we can start sending them our products."
WA Agriculture and Food Minister Ken Baston congratulated Walsh on the export project.
"I commend V&V Walsh on this project and I'm sure the opportunities this joint venture opens up will benefit WA producers into the future," he said.
Grand Farm's president Mr Chen Xibin visited WA last April to meet with Mr Baston, Peter Walsh and the Department of Agriculture and Food WA representatives to discuss the project.
Rated China's biggest importer of sheep meat and the third biggest importer of beef, Grand Farm sells to a chain of high quality stores across China.
The West Australian Farmers Federation's meat section president, Jeff Murray, said the venture was great news for the state's struggling farmers.
"Since the live export demise in Indonesia 18 months ago, we've had pretty poor prices for both cattle and sheep and it's taken 12 or so months to get back on our feet," he said.
Mr Walsh said his company would offer longer term contracts to farmers to try and give them the confidence to increase their production.
"We're looking at opportunities where we might be able to do joint ventures with farmers and grow with them and put the cattle in and let them manage it," he said.
Chief executive of Bunbury-Wellington Economic Alliance Matt Granger said he hoped the deal heralded a new era of opportunity and prosperity in agricultural exports.
"It's been reported that in the order of 100 extra jobs will be created locally from the deal," he said.
"Although there is always a multiplier effect which results in indirect employment throughout the local economy."
Local farmer Geoff Pearson, who runs a cattle feed lot near Bunbury, is keen to see something in writing.
"We all know that it takes time to produce animals and it can't just happen overnight," he said.
"We need those projections, those forecasts, those forward contracts because it is a long-term thing and we need to make sure that if we're going to put investment back into this industry, we are heading in the right direction."
The companies expect to get the Chinese government's final tick of approval for export by October.