Australian Agricultural to set up meat processing facility in Australia

Beef producer Australian Agricultural (AACo) plans to set up an A$85m ($88.23m) meat processing facility in Livingstone Valley, Northern Territory, Australia.

The hot boning facility will have the flexibility to include chillers for prime cattle processing.

It will have a design capacity of up to 225,000 head per annum, and is expected to process up to around 200,000 cattle annually once fully operational.

The facility will source stock from the northern areas of Queensland, South Australia, Western Australia and the Northern Territory, thereby supporting northern Australia’s cattle industry.

AACo chairman Donald McGauchie said the decision to construct the facility is another step towards vertical integration, especially due to AACo’s proximity to the growing Asian markets.

"The board determined that the project fundamentals around a processing plant in the Northern Territory are compelling, and believes it will secure the long term future of Australia’s northern pastoral industry," McGauchie added.

The construction of the facility and installation of equipment is likely to be completed in the third quarter of 2013, with the commissioning beginning immediately.

The facility will create 260 direct and 530 indirect jobs, and is expected to pump A$126m ($130.78m) into the local economy annually.

The processing facility will occupy 14ha of the 600ha Livingstone site, while the remaining area will be used to develop irrigation zones, natural wetlands and ponds.

The company noted that the additional land acquired will create a buffer zone between the abattoir and the adjoining areas.

AACo is in talks with several potential investors who are interested in the project, in order to raise third-party equity; however, it plans to use internal sources of capital if third-party terms are unattractive.

Australian Agricultural, based in Milton, Australia, is involved in breeding, growing, feedlotting, and trading of beef cattle as well as wholesale meat marketing.