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Kingdom is prime for first slaughterhouse

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Australian cattle being unloaded in Indonesia.Afp

Kingdom is prime for first slaughterhouse

Riding the wave of rising demand for beef in Asia, Cambodia’s long-awaited slaughterhouse could not come soon enough, with an emerging middle class in Cambodia also hungry for more premium meat from Down Under.

Since 2013, Cambodian company SLN Meat Supply has been building Cambodia’s first industrial slaughterhouse in Preah Sihanouk province, and the company expects it to be fully operational by the end of the year.

Initially, SLN is aiming to process about 1,700 head of Australian cattle per day, with 1,000 destined for Vietnam and the remainder for local consumption. 

“I’m scared to sign on to any more contracts because the cattle we get from Australia might not be enough yet,” Hor Sim Leang, managing director of SLN said, explaining the eagerness to have the abattoir completed by October. 

The firm is also negotiating with Chinese buyers and hopes that it will be able to export 2,000 head of cattle per day as soon as Chinese safety standards have been met and the slaughterhouse is in full flight. 

But it is Vietnam’s demand for Australian beef that will give SLN the kick-start it needs.

The neighbouring country imported more than 181,500 head of live cattle from Australia last year, a huge jump from just 1,427 cattle in 2010. 

“Cambodia acts as an extension of Vietnam,” said Ross Ainsworth, former chief executive of Northern Territory Livestock Exporters Association, referring to the regional demand. 

Optimistic about Southeast Asia’s livestock prospects, Ainsworth believes that cheap labour, an abundance of open fields and plenty of agricultural waste product to serve as animal feed makes Cambodia an ideal place to one day have its own cattle industry. 

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Indonesia has dramatically cut its import quota from Australia. Afp

Meanwhile, hoping to stimulate domestic cattle raising, Australia’s largest cattle exporter, Indonesia, slashed its import quota this quarter down to 50,000 cattle from the expected 200,000. 

Within days of the Indonesian slowdown, Australia’s minister of Agriculture, Barnaby Joyce, announced a deal with China that would pave the way for Australia to export up to a million cattle to the world’s second largest economy. 

Rising incomes have fuelled beef imports in China.

According to a 2014 report from ANZ bank, official imports grew four-fold in 2013 to a value of about $1.3 billion.

This has had a knock-on effect into Vietnam, where, in part, China is buying up Vietnamese-raised cattle. 

Long reliant on Indonesia, more markets in Southeast Asia means greater diversity and more stability in exports for Australian producers, according to Angus Gidley-Baird, senior animal proteins analyst at Rabobank. “With Southeast Asia and Cambodia coming on board, it will make it a securer, longer-term, bigger market, as people make decisions on whether they will produce an active trade market,” he said. 

However, it is not only a regional shift in market demand for Australian cattle. 

Figures are difficult to come by, but Cambodian beef imports were valued at about $722,000 last year, according to government figures. 

“[Consumption is growing] because the variety of meat is growing,” said Guillaume Simon, food and beverage project manager at MEAS Development Holdings, which has one of Cambodia’s largest portfolio of restaurant chains and catering firms. 

Seafood is still overwhelmingly the first choice for protein among Cambodians, Simon said, but increasingly, as more options have become available, people are looking toward pork and beef.   

Although SLN is confident that they produce to the standards required for export, analysts say there are still many things that need to be in place before the Kingdom can take full advantage. 

“The challenge, whether it’s Cambodia, or anyone going into beef processing and exporting, is to get an economically sustainable beef-processing system,” said Michael Whitehead, head of Global Agribusiness Research at ANZ.
 
“That is state-of-the-art processing, slaughterhouses, that is economically viable,” Whitehead said.

Time will tell if Cambodia’s slaughterhouse is up to standard. Nevertheless, SLN is buoyed by the rising demand for cattle in Southeast Asia.

“Everywhere from the other countries and provinces, they all come and sign a contract to become a distributor for us,” Leang said.

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