KEY POINTS:
The meat industry is targeting China as an emerging market for lamb.
Alliance Group chief executive Grant Cuff told a meeting of shareholders last week that the industry had also looked at the potential of Russia and India but found China to be the most promising.
High import
tariffs ruled out India.
The industry would look at Russia once China had been assessed to identify consumers, product forms, brands and logistics.
"We will look at Russia, but all the stars lined up better for China."
Cuff said the industry intended targeting high-worth Chinese consumers with high-value products.
It could take six to 12 months of further research to find and work out how to target those consumers.
New Zealand's recent free trade agreement with China offered little assistance in removing already low red meat tariffs, but Cuff said its real benefit was helping to deal with bureaucratic red tape and establishing distribution networks.
Last year, it was announced that Meat and Wool New Zealand, Affco, Alliance, Anzco and Silver Fern Farms - which together account for 75 per cent of New Zealand meat exports - had united to scope new lamb market opportunities.
Cuff said claims meat companies could not work together were not supported by evidence.
Development was under way on joint company ovine dressing research which he said would remove 18 work stations on a chain. A typical chain had 30 work stations.
An application had been lodged with the government's Fast Forward Fund.
Initial reaction has been favourable, Cuff said.
Meat companies were also working together to test a Swedish designed pick-and-pack robot versatile enough to handle a variety of products.
Cuff said the vision technology could recognise and select specific cuts for packaging removing the need to interrupt and reprogramme a processing line when the product mix changed.
Alliance had also bought the first commercial primal cut robot to be developed by the automation division of Scott Technology. The company's ViaScan yield technology was being expanded into beef and would be installed at its Mataura plant.
There were also plans to expand beef operations at Mataura and Sockburn.
Cuff said markets for lamb, beef and venison are looking extremely promising, indicated by spring lamb prices to UK farmers being 40 per cent higher than a year earlier.
He attributed the higher prices to an easing exchange rate and a world shortage of protein finally being reflected in higher market prices.
While returns from chilled product were far superior to frozen, Cuff said it was not a case of simply increasing volumes as exporters risked a political backlash from the local industry.
Brazil had done that with chilled beef but had alienated the local market to the point where they were now shut out of the European market.
Prices for co-products were also looking strong.
Cuff said reduced wool volumes and appreciating synthetic carpet prices from the rising cost of oil would help that market. Otago Daily Times
