SFF to go it alone into China

Major meat processor Silver Fern Farms will expand into the premium lamb market in China on its own after a proposed partnership of processing companies collapsed reports Stuff. The partnership was to be modelled on the successful NZ Lamb Company joint venture in North America, but failed to get past the business case level. SFF chief executive Keith Cooper has refused to reveal which company or companies pulled out of the consortium of SFF, Alliance and Anzco, but Alliance has since said the returns were unconvincing. He said there was no bad blood between the companies and the North American venture would continue unaffected, but SFF would now look at opportunities to develop its own brand. The proposal failed because people did not accept the returns from the business case and a longer-sighted view was needed, he said. "It may not have been overly attractive, but sometimes we need a bit of foresight. Most companies say China is a challenging market, but with opportunities. Who are we in the NZ meat industry to say it is not an opportunity and swim against the tide?" SFF will join a trade mission in China led by Trade Minister Tim Groser in May and seek connections to Chinese consumers. The company has long had a presence in China and has deals with three operations in Dalian, a city in the eastern Liaoning province. The other companies appear to have been put off by the initial payback from the investment needed to develop the market. Average lamb returns are $3700 a tonne in China compared with $8085 in Britain. Chinese demand has until now been for lower lamb cuts such as lamb flaps and offal, but SFF is encouraged by the country's growing affluent population. Mr Cooper said lower-end products provided a good income stream, but SFF saw opportunities for selling premium products such as racks of lamb and ready-to-cook cuts.