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Chinese investment stimulates local beef industry

The two nations signed a landmark trade agreement in 2017, allowing SA to export its beef products to China, in turn creating a booming local beef industry.

3 December 2018: Successful Public Private Partnerships (PPP) are essential to unlocking lucrative trade agreements that stimulate economic growth.

This is the view of Louw van Reenen, CEO of Beefmaster, who was a guest of the department of trade and industry (dti) at the prestigious CIIE held in Shanghai from 5 to 10 November 2018. Beefmaster is a renowned South African beef producer fast cementing its reputation as an international specialist supplier of world-class products, with a customer base that stretches throughout southern Africa to the Middle East, Far East, and beyond.

“Since the start of the trade agreement with China, Beefmaster’s exports have doubled. This is despite the limits created by the volatile maize price, the shortage of weaners, which made introducing fresh stock to our herd challenging, and a pervasive country-wide drought,” said van Reenen, speaking from Shanghai.

He added that agreements such as these ensure that the meat industry remains profitable, a stable source of revenue and employment, and stimulates the growth of commercial and emerging farmers.

Beefmaster is currently only one of three beef producers in the country that has been exporting its products to the Chinese market under the trade agreement. Due to the quality of beef cuts supplied by Beefmaster, the Chinese market has gradually increased its demand for select cuts.

Recent reports echo this trend, with the Organisation for Economic Co-operation and Development (OECD) suggesting that beef will be the fastest-growing import sector in China in coming years. China’s official beef imports have grown almost 20-fold from 23,702 tons in 2010 to an estimated 460,000 tons in 2015.

“Our status as a preferred supplier of red meat to the Chinese export market is as a result of our leading-edge technology in the areas of herd management, productivity, purchasing, marketing, hygiene and housekeeping,” said van Reenen, adding that its state-of-the-art technology allows the company to customise and “produce to order”.
Van Reenen believes that PPPs will go a long way to help strengthen the local farming industry and create a trustworthy export industry that is renowned for its beef quality products.

“We are committed to working with emerging farmers. We run mentoring and educational programmes, often alongside Government, to empower smaller farmers in the meat and fodder industries. We want to see more farmers reach the scale and high-quality herd standards required to take advantage of export markets. It is only by all parties working together that we will be able to achieve this,” said van Reenen.

Sectors that participated in the CIIE from South Africa and on invitation from the dti included agro-processing, footwear and leather, engineering, petro-chemicals, railway components, defence, and information and communications technology.

“The CIIE was an excellent platform to promote South Africa’s trade and investment capabilities, and it was an honour to be part of it. Our purpose in attending was to thank our existing customers in China for their continued business and further cement our good relationship with them,” said van Reenen.

According to reports, total trade between the two nations grew from R205 billion in 2012 to R318 billion by the end of 2017.

Nabiella De Beer. 


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