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The largest cattle feedlot in the world is increasing South African beef exports beyond the Middle East in order to take advantage of the growing demand in China and in the United States. other Asian markets.
The Karan Beef fattening farm south of Johannesburg is emblematic of South African agriculture's desire to boost exports of a larger number of niche products ranging from grapefruit and avocados with macadamia nuts. Increasingly, emphasis is being placed on high value-added products rather than mbad production of less lucrative crops such as maize.
With 160,000 cattle on the property, which went from milk production to beef production around 1980, and half a million animals sent to the slaughterhouse each year, this 2500-hectare farm is the largest fattening park on a single site in the world, according to director Matthew Karan.
Cattle are purchased from farmers in the country aged about 8 months. In four months their weight has more than doubled to around 420 kilograms. Molbades and gluten are mixed in a factory that looks like a production line. Specially designed trucks constantly complete the converted bins. The operation accounts for 70% of South Africa's beef exports and 30% of the local market.
"It's as good as you would see in Texas," said Karan, one of the three sons of founder Ivor, whose own father owned a cabinet manufacturing company in Johannesburg.
The company exports beef to the Middle East since the early 2000s and got access to China last year, doubling export volumes, has Karan said in an interview at the feedlot. From November to November 2004, he shipped 4.34 million kilograms of beef to China and 4.68 million kilograms to the Middle East.
"China is the market that puts pressure on us, China needs more beef."
The company had to work hard to promote South African beef, which is generally lean and pink because of the local grading system, he said. This compares to the more mottled meat of the United States and Australia, which contains more fat.
"China is the market that is putting pressure on us, China needs more beef," said Karan. "We have limited the volumes we send them because we do not want to get out of the local market. We can potentially increase our exports, but this facility is practically at our maximum. "
Chinese beef imports have soared this year and are on track for an annual record. Karan Beef is also considering Malaysia as a new export market and needs to be audited to ensure that it meets the country's halal standards early next year.
Gerhard Schutte, chief executive officer of the Red Meat Producers Organization, said the beef sector in South Africa is under pressure to increase production to meet local and international demand. One possibility is to build the capacity of small farmers, who own about 40 percent of the country's livestock, but lack the competitiveness needed for export markets, he said.
In October, the Karan family agreed to sell a 90% stake in the company to Public Investment Corporation, Africa's largest fund manager and custodian of South African civil servants, and the black Pelo Agricultural property. Ventures for 5.2 billion rubles one of the biggest attempts to fight the legacy of apartheid in South African agriculture. The agreement is the largest of the ICP to date in the agriculture sector, said the company's chief of business, Deon Botha.
The family will continue to run the business for the foreseeable future, Karan said. An earlier offer of R6 billion for the entire activity of Chinese investors wishing to export all production had been rejected, he said.
"We have to make sure to leave our inheritance properly," said Karan. "Do you really want to be the guy who sold South Africa?"
© 2018 Bloomberg L.P
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