3 Aug 2009

Export of high value meat cuts to Asia paying off

5:58 am on 3 August 2009

Blue Sky Meats says there have been good initial results from its efforts to export high-value meat cuts to Asia.

But it's warning it will be a long, slow process before any real benefits are evident.

The Southland-based company announced at the end of last year it was looking at exporting the high-value products, as well as lower-value cuts such as breasts and flaps, which have traditionally done well in China.

Chair Graham Cooney says the decision to explore China was due to the NZ - China Free Trade agreement that was signed more than a year ago.

Contributing to the decision by Blue Sky was a belief that the currency in China will appreciate against the New Zealand dollar over time, and China's population of 1.3 billion people and a rapidly increasing middle class affluence.

But Mr Cooney says it will be a long, slow process because of the ability to do business in China and China's tariffs on meat do not disappear completely until 2016.

Trading result

Blue Sky Meats reported a significantly improved financial result for the past year.

It made an after tax profit of almost $4 million, compared with $282,000 the previous year.

Mr Cooney says the high kill of capital stock in April and June last year when southern sheep farmers were still converting to dairying was a factor in the improved result, as well as a favourable exchange rate.