Many Exporters down under are quickly charting a course for a brighter future
Although located thousands of miles from its major export customers, and despite global competition continuing to get tougher, many of Australia's meat exporters are bullish about future growth potential.
Their tremendous hunger to further strengthen existing export markets, as well as to put a hard bite on potential and emerging new markets, has some Australian meat executives licking their chops with great anticipation.
Thanks to the utilization of evolving processing, packaging and distribution technologies, and an undying pioneering spirit that has existed in some cases for hundreds of years, many Australian meat exporters are fast on their way charting a course for a brighter future.
Castricum Brothers Pty. Ltd.
Castricum Brothers Pty. Ltd. of Victoria, Australia, is a privately held packer of beef, mutton and lamb products. The roots of Castricum Brothers date back to Holland more than 200 years ago. The father of Theo Castricum, the current director/export manager of the company, was a master butcher who came to Australia from Holland in 1952.
The Castricum family had 10 children. Castricum's father and older brother began the business. Today, five brothers own and operate Castricum Brothers.
"We originally started in the domestic market," Castricum says. "Nine years ago, we began to get involved in the export business. We're now exporting product to North America, South Korea, Japan, Taiwan, Hong Kong, Southeast Asia, the Middle East, Europe, and South Africa.
"We're now concentrating on the Southeast Asian region," Castricum notes. "[Southeast Asian countries] are starting to develop more ideas for lamb and beef, which are traditionally Western-type foods. Because of an increasing number of foreign tourists, there is a big opportunity in the foodservice industry, particularly high-quality restaurants."
Castricum Brothers employs about 400 people. Its plant slaughters 600 to 700 cattle and 3,000 to 3,500 sheep and lambs a day. Forty percent to 50 percent of the meat processed at this plant is for the domestic market, the rest is for export.
"We use very high-quality, grass-fed, natural-range-fed beef and lamb. Only a small percentage of the product we process comes from grain-fed animals," Castricum points out.
Different export markets require unique meat products.
"Australia has now developed the beef feedlot industry just to supply the Japanese market," Castricum notes. "We're talking about 150-day, grain-fed beef. But once you put those cattle onto feed, there's only one market you can send them to: Japan."
Like the rest of the world, Australian consumers are looking for leaner meat.
"In Australia, fat is a dirty three-letter word," Castricum says. "We supply very lean quality beef and lamb products that are also very tender, tasty and juicy. Australia is located far from the rest of the world. In order for us to supply good, clean, fresh product to go the distance it goes, we have to do our job properly.
"Because a big part of our business is chilled beef, it's only through proper quality control procedures and maintaining standards at the highest levels we can achieve this goal," he adds.
When asked if his company exports products in chilled or frozen form, Castricum explains: "The more value-added markets call for chilled products. It's a matter of educating the end-users of the life of the product. We export [vacuum-packed] chilled beef-Australia is a big exporter of chilled beef-to the Japanese."
Export products are shipped in 20-foot containers. The average load is 25,000 pounds per container, and product features a 12- to 14-week shelf life.
Castricum says his company will concentrate on serving niche markets with value-added products that other companies find too difficult to serve.
When asked about new technologies being used at the plant, Castricum answers quickly: "The main reason we introduce technology is to cut back on labor costs. The basis of producing good product is the hygiene. Proper hygiene stems from your training and procedures you impose on your workers and the standards you have within the plant.
"We're working toward conforming to ISO 9000 by the year 2000," he adds.
Communicating with producers is another important part of maintaining success. Castricum Brothers utilizes AUS-MEAT feedback sheets where computerized assessments are done on carcasses and the feedback goes back to the farms. The company also conducts seminars and hosts plant tours for farmers and producers.
In looking to the future, Castricum tells MM&T: "Our biggest challenge is the threat of big multi-national companies [such as ConAgra and Nippon] taking over the Australian meat industry [at the expense of the small- and mid-sized Australian meat companies.] If you go back 15 to 20 years ago in the United States, there were many meat packers and processors in that country. Today, 80 percent of the U.S. industry is dominated by three [beef] packers."
Hill's of Darling Pty. Ltd.
Dating back to 1854, Hill's of Darling Pty. Ltd. (purveyors of Australian lamb based in Melbourne) is one of the oldest meat firms in Australia.
"I'm the fifth generation of Hills that has been in the meat trade," points out Bill Hill, company president. "The old bloke came over originally as a butcher boy on a ship from England and started a butcher shop. "We eventually moved into slaughtering and retail butchering, and we finally moved out here in 1986 and got into exports," he adds. "We saw a niche in the market for a company to specialize in lamb cuts."
From 1986 to 1994, the company "struck through some of the roughest times" Bill Hill had ever experienced.
"We've seen about eight major packers go broke in that particular field," he says. "It's a very harsh industry. In terms of quality, we consider ourselves today as the No. 1 Australian lamb packer."
Hill's of Darling has the first independent boning room in Australia to get an approved quality agreement (assuming responsibility for operations and practices without Australian Quarantine and Inspection Service presence).
"AQIS inspectors come in only to monitor our operation," Hill stresses. "We're now moving toward ISO accreditation, and that's just to further enhance our quality control.
"Our major markets are Canada, the United States, Europe and throughout Asia-particularly Japan, Hong Kong and Singapore," Hill says. "Our customers include the leading supermarket chains and hotels throughout the world. We also serve foreign embassies throughout the world, and that's a growing sector of our market."
Hill said an emerging international trend he sees is a continuing decline in the number of butchers.
"Clients are asking us to do more back in Australia with the meat," he points out. "They can't be paying cutters $20 an hour to mess with product. And air freight is becoming very expensive. So, we'll be doing more value-adding back here in Australia."
Hill said lamb is becoming a more specialized product. The better cuts are distributed refrigerated by air, but the balance is distributed frozen via sea freight at a substantial savings.
When asked about future challenges, Hill tells MM&T: "We've climbed quite a few mountains over the years. We're one of the oldest meat companies in Australia. My great-grandfather worked in the Chicago stockyards. I did, too. We have a family business. My children are in it; they're moving into the sixth generation.
"I'm excited about the future," he adds. "A lot of new technology is on the horizon. Although we're running short of labor, and we now have four basic cuts of lamb, two of the cuts can be handled by machine; a third one will come on stream soon [expected in 1995]. And the fourth one will be coming down the track. We're getting back to counter-ready products.
"We'll turn out counter-ready products in the future, but the packaging is still not right [for export]," Hill notes. "The technique hasn't been perfected where it can travel by sea and come out looking 100 percent. A lot of work still needs to be done in this area."
Hill is mindful of the fact that competition is tough throughout the world.
"That is the challenge-to have your products stand with some of the best in the world," he stresses. "That's why we're going with branded product; we're fairly confident that we now understand the marketplace."
G. & K. O'Connor
G. & K. O'Connor Pty Ltd. is a totally integrated beef slaughtering, boning and chilling operation with 320 employees located in Victoria, Australia. About 63 percent of the beef products processed at this plant are for the Japanese market; 25 percent (manufacturing meat and assorted frozen items) goes to the United States; a small amount goes to the European Union; and only about 4 percent is for the Australian domestic market.
The company's main markets for red offal are the Middle East, Hong Kong, Japan and the United Kingdom.
About 450 to 480 cattle were being slaughtered daily at the time of this trip. O'Connor's plant utilizes both conventional slaughter (with a captive bolt gun) and Halal slaughter, which is needed for Middle Eastern customers.
When asked if the company was targeting any new foreign markets for export, plant manager Peter Allen says: "Everyone seems to be talking about China. We're in Taiwan at the moment, and we're looking closely at that market. We've also looked at the Russian market, which may have potential."
During the next several years, executives will be investigating developing a full rendering operation, Allen stresses.
"We're looking at rendering all our raw materials," he notes. "We're also looking at evaluating some of our by-products, such as hides."
In looking to the future, increased competition from large, multi-national companies concerns Allen.
"We're seeing the development of big feedlots [by companies such as ConAgra, Nippon and Banker's Trust]. Who's to say that in five years, they may build their own slaughtering facilities-and away they go. [Such actions] wouldn't give smaller companies such as O'Connor much area to move."
Comgroup Supplies Pty. Ltd.
Comgroup Supplies Pty. Ltd. specializes in processing frozen convenience food products for the domestic and international fast-food, catering and supermarket outlets.
"In addition to supplying Burger King (called Hungry Jack's Down Under) in Australia [with ground beef patties and chicken products], we're engaged in the domestic business of catering. And we're presently entering the export market," says Paul H. F. Gregory, director of Comgroup of Queensland, Australia.
Comgroup's Queensland (U.S. registered) processing facility manufactures frozen beef patties, reconstituted steaks (for export and domestic to the institutional trade), and standard chicken products for Burger King, such as nuggets and patties.
"Our volume is modest compared to U.S. companies," Gregory says. "We run an average of 10 hours a day; five days a week. We have two shifts."
When asked about product trends, Gregory said, "Japan is this plant's largest international customer. We send about 15 tons to 20 tons of meat every four to six weeks to Japan. In some cases, we season our patties, and we also look at the percent of fat or lean."
Looking to the future, Gregory said the biggest goal for his plant is to produce more convenience foods.
"The less work that has to be done at the retail outlet, the better," he adds.