THE North Australian Pastoral Company intends to press forward into branded beef products, capitalising on growing hormone free, GMO free and grassfed markets particularly in the US and China.
Speaking at the Rural Press Club at Beef 2018 on Thursday morning, chief executive officer Phil Cummins said NAPCo’s historic name had value.
“History and heritage has a value as does the clean, green, sustainably produced attributes of the beef we produce,” Mr Cummins said. “It’s about how can we expand in the markets we are in and reach even more customers.”
He said he expected a third of NAPCo’s revenue would be generated from branded products within five years.
Mr Cummins said the business model that had been in place across for about the past 10 years had been extremely effective.
However, more value was likely to be able to be extracted from the business if it was better able to better appreciate what consumers wanted.
It's about how can we expand in the markets we are in and reach even more customers.”
There were also potential market opportunities in post-Brexit UK and Europe, depending on trade access issues.
The $78 billion Queensland Investment Corporation, owned by the state government, bought an 80 per cent stake in NAPCo in May 2016. The company runs about 200,000 cattle including 90,000 breeders on 6.1 million hectares covering 14 properties and Wainui Feedlot near Dalby.
Mr Cummins said the purchase of NAPCo had proven a sound investment. Composite steers finished for export are processed through JBS, while weaner cattle are processed by Woolworths for the domestic trade.
NAPCo recently bought the 99,990 hectare Longreach region property Portland Downs for a reported $23 million. However, Mr Cummins remained noncommittal on suggestions that QIC may be interested in securing Consolidated Pastoral Company.
The CPC portfolio involves about 400,000 cattle running on 16 properties covering about 5.5 million hectares of country in Australia as well as feedlot operations in Indonesia. The CPC business is estimated to worth anywhere between $800 million and $1 billion.
Despite its relatively small size NAPCo within the QIC’s investment portfolio, the cattle breeding and finishing operation is one of corporation’s most high profile investments.