Indonesia’s largest livestock importer has taken the first steps towards moving to China, agreeing to build the country’s largest feedlot and declaring restrictions on importing Australian cattle to Indonesia are unlikely to be lifted quickly.

The feedlots of Santori, capable of handling some 55,000 animals, are now “basically empty”, according to executive Bruce Warren.

Mr. Warren, the head of Santori’s value-added beef division, blamed Indonesian government restrictions imposed in the wake of Canberra’s live export ban last year. Santori, which once imported almost a quarter of the Australian cattle going to Indonesia, has signed an agreement to build a 30,000 head feedlot in China’s Shandong Province.

“From an Indonesian company’s point of view, we don’t think the cattle situation will improve any time soon, and we’ve already taken the decision to go to China,” he said. “We’ve made the first steps towards moving to China.”

Mr. Warren said demand for red meat in China was growing, with imports through both “legitimate and illegitimate channels” on the rise.

“We think the national herd is actually shrinking,” he said. “The Chinese government is very proactive. They also want to invest. Although it’s not easy to work in China, it’s very stable now. If you understand the business culture, it’s relatively easy to plan. It’s not like that (in Indonesia) at the moment.”

The company will start by feeding male calves born in its Chinese dairies. But in the long term, it hopes to import Australian cattle to China.

Indonesia progressively cut its import quota for Australian cattle in the wake of a month-long ban on live exports to Indonesia imposed by the federal government last year, following revelations of animal cruelty at Indonesian abattoirs by the ABC TV’s Four Corners.

This year’s import quota of about 260,000 is less than half the figure before the crisis.

Source: The Australian Dec 2012

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