THE Australian Agricultural Company is pushing ahead with plans to build an abattoir in Darwin.
The plans are in a bid to insulate it against any future cuts in Indonesia live export quotas.
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Managing director David Farley said the Darwin abattoir had been in development several years before the Indonesia quota cut.
However, he said "the effect on domestic and live export pricing is one of the things that the abattoir is designed to help insulate AACo from".
In a recent presentation to shareholders, AACo said it was in "advanced" discussions with parties looking to invest alongside the project and there were discussions with potential offtake customers.
Mr Farley told The Weekly Times AACo would focus its marketing efforts in high-growth regions including the Middle East and South-East Asia.
"The Darwin abattoir will provide another marketing channel for those efforts," he said.
Mr Farley said the abattoir would reduce trucking distances for many northern cattle for processing.
"All the major abattoirs are on the east coast (so) the Darwin abattoir will not only save millions of kilometres a year in transport, it will also allow AACo to more tightly control its supply chain, including improving animal welfare outcomes," he said. "The plant will also be carbon neutral."
Rabobank senior animal proteins analyst Sarah Sivyer said the abattoir would be well placed to meet growing demand from Asia and US for chilled and frozen beef.
Ms Sivyer said beef export numbers jumped last month, up 17 per cent from 2012.
"There was so much supply because it's been dry and farmers had to make those decisions about pasture growth," Ms Sivyer said.
She said key markets were Japan, the US and Korea, but there had been a massive rise in the amount of beef going to China.
"Exports to China jumped by a ridiculous amount in the last four months of 2012," she said.
Exports to China finished 324 per cent above 2011, with a total of 32,900 tonnes exported.
"China tightened up the 'grey channels', which are informal channels from countries including Vietnam, so that means there's an increase in demand for beef from legal channels," Ms Sivyer said.