The Manildra-backed meat producer and processor, Argyle Foods Group, is teaming up with a big Hong Kong business to build two beef and lamb retail packing plants in China.
Farmer-owned Argyle, which has grown rapidly in the past decade from the Graham family’s South West NSW mixed farming business, has taken on a consortium of local and offshore investors.
Their money will fund expansion of its branded meat lines to Asian supermarkets and foodservice providers, plus a big productivity push to lift cattle numbers supplied from the family’s Angus beef herd, and from other producers.
Argyle’s grass and grain-fed meat cuts already sell in about 1200 retail outlets in Hong Kong, Singapore, Taiwan, China and Korea, and in about 800 Australian supermarkets.
Chinese joint venture
The capital injection, reportedly worth about $20 million, includes input from big trading group, Hong Kong-listed Dah Chong Hong Holdings.
Dah Chong Hong (DCH) will also be a minority joint venture partner in the southern Chinese packing plants.
The first, and smaller, of the two sites will open in October, followed by a larger operation later next year.
Argyle’s Chinese sites will replicate its high-tech Nowra district portioning and packing plant on NSW’s South Coast.
Extra demand also means we’re putting in more equipment at Nowra in coming months and probably looking to lift numbers overall.
- Lachlan Graham, Argyle Foods Group
The Bomaderry plant, which employs up to 60 staff, is currently handling about 100 tonnes of meat a week, packing and boxing a wide range of cuts.
Its mincing lines can pack a retail-sized tray every second to pre-set portion and quality requirements, while special scanners detect any foreign matter, including bone chips.
“We’ll be using the same machinery, QA systems and software, and management teams from Australia to oversee the new plants,” said Argyle Foods chief executive officer, Lachlan Graham.
“Extra demand also means we’re putting in more equipment at Nowra in coming months and probably looking to lift numbers overall.”
Co-operation with DCH would give Argyle access to premium distribution channels in Asia, particularly China, complementing the direct market relationships the company already had with customers.
DCH’s current business interests range from motor vehicle dealerships in China to food, electrical and healthcare product distribution.
“We’ve partnered with DCH previously and this will enhance our brand awareness and reputation of our Argyle family of products,” Mr Graham said.
Last month’s capital raising drew funds from high net worth investors and family offices, but will not dilute the Graham’s existing partnership with the Honan family’s flour and sugar processing Manildra Group.
Manildra bought a stake in Argyle in 2014, while also buying the Cootamundra abattoir where stock were slaughtered before further processing at Nowra.
Since supply shortages forced Cootamundra to be mothballed last year cattle have been trucked to Casino on the NSW North Coast for slaughter and boning, and sheepmeat sourced from another southern processor.
Family success
The Argyle Prestige Meats, Argyle Pastoral and Argyle Processing businesses are owned by Bryce and Lachlan Graham and family, whose fourth generation Harden grazing and cropping property “Argyle”, and its Angus stud, are the basis for livestock sourced to fill retail supply contracts.
“We’re making a lot of changes and management changes to get more from our genetics in a sustainable manner, including leveraging off extended family members and other suppliers whose operations share our genetics,” Mr Graham said
Traceability processes back to the supplier farms would eventually be linked to bar coding on every retail pack sold in Australia and Asia.
“In the longer term we may be leasing extra country in other areas.”
Argyle’s own brands include Diamond G Meats, Eight Mile, Healthy Farmer and 2Farms.