Europe not a lost lamb market

TIM CRONSHAW
Last updated 05:00 02/06/2012

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Large South Island meat exporter Alliance Group plans to grow its sheepmeat trade even further in China, but is cautious about over-reliance on that market.

Chief executive Grant Cuff said China was an important destination for the meat processing co-operative, and it was eyeing future growth and aimed to be the largest exporter of lamb to that country.

The Chinese market had become more sophisticated with growing demand for further-processed product, he said.

But the Invercargill-based meat processor is questioning how big it wanted to get in one country. Cuff said it was good to have diversification in Western markets, even if Europe was facing financial difficulties.

"Diversification is good and only works if we keep similar markets irrespective of world dynamics. There has to be partnerships and relationships." Alliance is in a 12-year partnership with Grand Farm Group, China's largest single importer of New Zealand sheepmeat.

The companies will mark the milestone with a joint branded label incorporating Alliance's Pure South brand. The label will go on more than two million packs containing cuts for hot pot cuisine and lamb rolls and slices for kebab-style dishes to retail and food service customers.

Alliance began exporting to traders in Dalian in the mid-1990s and identified Harbin company, Grand Farm, as a key partner. Grand Farm is the best-known distributor and marketer of quality red meat in Northern China.

Cuff said Alliance started servicing China initially in lower cuts for hot pots, kebabs and soup, but sales of many other cuts were growing, including high-end racks and boned legs, on a small scale.

He said the importance of the Chinese market could not be underestimated.

"It is No2 in volume and No4 by value and we are a bit ahead of the game compared to New Zealand." In the late 1990s New Zealand sold China about 5000 tonnes at about 2 per cent of New Zealand exports.

"Today China is about 15 per cent at 37,000 tonnes and that's quite a big growth in a relatively short space of time."

Sheepmeat consumption is increasing in the vast market. Heilongjiang Province's capital city, Harbin, has a population of just over 10 million people.

"Other areas in China, including the main cities of Beijing, Shanghai and Guangzhou, offer further opportunities. This potential continues to encourage Alliance to invest resources and expertise in China."

China was the largest market for frozen lamb in the six months to last March, taking almost a quarter of sheepmeat exports during this period.

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Alliance sales are strengthening in the emerging markets of Southeast Asia, such as Malaysia, Vietnam and Indonesia, as Westernised food and restaurants gain popularity.

Unlike in traditional lamb-eating nations such as China and in the Middle East, sales are slower.

They are expected to pick up as lamb makes the transition from restaurant-only food to household dining item.

- BusinessDay.co.nz

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