Vietnamese invest heavily in Australian cattle industry
The purchase of the US$13.6 million cattle ranch by An Vien Pastoral Holding and Agriculture Company is the first far-reaching Vietnamese agricultural investment in the land down under on record, says MLA.
Per MLA, Pham Nhat Vu, chair of the An Vien Media Group holding company, was listed the official successful bidder of record for the purchase of the 200,000-hectare cattle ranch.
The deal includes the purchase of 10,000 head of Brahman cattle.
Commenting, an MLA spokesperson said: When you see high-net-wealth individuals and global corporations making beef investments in Australia, it shows confidence in the Australian beef industry and gives confidence that they believe the consumption of red meat globally is strong.
Though An Vien did not initially respond to requests for comments on the deal by GlobalMeatNews, says MLA, it is widely speculated the impetus for the investment is that it is much easier for Vietnamese to invest in big ranches in Australia than procure the large amounts of land needed in the Southeast Asian country.
It is a very complicated undertaking in Vietnam to get even a 100-hectare size plot of land, which is the bare minimum necessary to operate a large-scale ranching operation, says a local Vietnamese rancher.
For comparison purposes, there are many cattle operations in Australia that cover thousands of hectares each, he says, adding that the move makes good strategic business sense.
Even though Australian taxes are much higher compared to those in Vietnam, weather and market conditions are more favourable and even a comparatively small US$4 million investment could provide a solid rate of return.
While Vietnam is better known for receiving foreign direct investment rather than providing it, in recent years, forward thinking Vietnamese companies have been looking to invest in numerous countries— from Laos to Russia, and Australia.
A spokesperson for the Australian Trade and Investment Commission (Austrade) disclosed that in 2015, Vietnamese outward foreign direct investment into Australia was US$348 million, while Australian investment into Vietnam was an estimated US$1 billion.
Vietnamese also are acquiring a growing taste for beef, and the An Vien Pastoral Holding and Agriculture Company might be targeting exports back to their home market.
An Austrade spokesperson said there had been an exponential growth in the number of cattle exported by Australia to Vietnam over recent years, with a peak in 2015 of 360,000 head.
He forecasts that 200,000-live head of cattle would be imported into Vietnam from Australia in calendar year 2017, in part fuelled by the lack of import tariffs from Australia to Vietnam.
In addition, the Austrade spokesperson noted that the Vietnam government considers live cattle as a useful input that can have added value within Vietnam through slaughtering and processing.
Beef consumption per capita per year in Vietnam, according to official sources, currently stands at 2.5 kilograms in a nation of an estimated 95 million people, which is expected to grow in coming years.
