A much stronger market presence for chilled New Zealand lamb in Saudi Arabia is envisaged following the establishment of a new New Zealand agribusiness hub and demonstration farm in Dammam. Meat exporters welcome the move.
Speaking to the Saudi Ministry of Agriculture in Riyadh, during his current trip to the region, Minister for Primary Industries Nathan Guy announced that the New Zealand Government had committed $6 million to establish the new agribusiness service hub.
This will be the first of its kind for New Zealand, the Minister said, adding that the farm development of the sandy plains is impressive. It will comprise 15 centre pivot irrigators, a feed mill, a sheep breeding operation, a lamb and cattle finishing feedlot and a processing facility.
He explained that the demonstration farm will be a model for vertical integration, from cropping to fresh meat supply to the local market. “It will be a full showcase of New Zealand agritech including technical services, farming systems, animal health, on-farm equipment, genetics and farm enterprise. New Zealand will also provide a genetics programme which will include animals for breeding.”
According to the Minister, the scale of the farm and the potential for New Zealand is significant. “A broad range of New Zealand agribusiness companies are expected to be involved in the demonstration farm and it is hoped that the first services will be installed in Dammam by mid-2014,” he said.
“In addition to being a substantial investment and project in its own right, it is also expected that this demonstration farm will create other opportunities for New Zealand in this market, fast track partnerships between New Zealand and Gulf Cooperation Council (GCC) businesses and quite possibly open up significant opportunities for New Zealand companies elsewhere in the Arab world. I envisage this will also provide a much stronger market presence for the export of chilled lamb to Saudi Arabia.”
Meat Industry Association chief executive Tim Ritchie commented that New Zealand meat exporters sent $116 million worth of lamb to Saudi Arabia in 2013, but only a relatively small amount of that was chilled product (around $3 million).
“Since chilled product is generally higher value, if this project in Saudi leads to more demand, that would be a welcome development.”
The Gulf region is significant for New Zealand meat exporters, with particular importance as a destination for sheepmeat, said Ritchie. “Accordingly the Government’s investment is useful in promoting New Zealand as a reliable source of protein. If it leads to conclusion of the New Zealand – GCC free trade agreement, that would be even better.”
During his visit, the Minister also signed a protocol with the Ministry of Agriculture in Saudi Arabia providing a framework for exports of livestock – live sheep, goats and cattle –from New Zealand to Saudi Arabia for breeding purposes. It covers animal welfare requirements relating to either sea or air freight and contains a guarantee that the animals will be allowed to disembark upon reaching their destination.
New Zealand ceased exportation of live sheep for slaughter in 2003, but the export of livestock for breeding purposes has continued to grow with cattle, sheep or horses all shipped or air-freighted every year, the Minister explained, adding that New Zealand has agreed livestock import health conditions with dozens of countries. Sheep exports for breeding purposes average around 400 a year, he said.
“Following this signing, it is expected that the first research breeding flock of sheep from New Zealand will be air-freighted before Christmas in order to commence the new Saudi hub operation,” he said. “The protocol signed today is a key part of ensuring the success of the agribusiness hub in Dammam and cementing in our future relationship with Saudi Arabia.”
Saudi Arabia is New Zealand’s largest trading partner in the GCC, which was established in 1981 between Bahrain, Kuwait, Oman, Qatar and Saudi Arabia. According to NZ Trade & Enterprise’s five year NZ Inc Strategy for the GCC, exports of sheepmeat and chilled beef totalled $175 million and contributed to a total of $1.5 billion worth of exports to the region in 2012. The New Zealand Government’s Strategy is aimed at growing exports to the region, in pursuit of its Export Double goal within the Business Growth Agenda.
Food security, which is high on the agendas of the GCC members said the Minister, means that New Zealand, “as a world leading agricultural producer is a natural partner for the GCC.”