Australian Agricultural Company to focus on high quality beef

By Aidan Fortune

- Last updated on GMT

The new AACo beef brands will be launched globally
The new AACo beef brands will be launched globally

Related tags Beef

The Australian Agricultural Company (AACo) has signalled its intent to move into the high-quality beef market, with aspirations for global exports. 

During the announcement of its half-year results, AACo said it would be looking to export its newly launched Westholme and Wylarah luxury beef brands around the world.

Jason Strong, managing director, said: “Our aspiration to be a differentiated branded beef company came to life in October 2016 with a local launch in Singapore of our flagship luxury brands, Westholme and Wylarah. The company strategy is to launch these brands into other key markets over the next 18 months. The launch was the latest step to transform AACo to a vertically integrated business, selling luxury beef brands, fundamentally changing the way we sell and deliver our products to consumers. This strategy will underpin the ongoing incremental increase in our average sale prices.”

Its branded beef sales made up 92% of total sales, up from 86% in the previous year. The new brands had a launch in Singapore in early October.

“This represents our initial drive towards changing the global luxury beef segment. As our vertical integration strategy takes shape, we are fundamentally changing the way we sell and deliver our products to consumers,”​ added Strong. “This strategy will lead to increased sales prices.”

In its half-year results (six months to 30 September), AACo reported a net profit of $47.9 million (m) with operating EBITDA up $2.4m to $13.9m. It said it had cut production costs by 25% by “taking advantage of strong seasonal conditions, as well as reducing operational costs from its strategic decision to own cattle right through the supply chain”​.

The business has also invested in supplies for the coming two years. Strong said: “We continued our efforts to integrate our supply chains and ensure consistent supply for each of our beef programs. For example, our increased knowledge of supply and demand across the supply chain signalled that we needed to build cattle inventory in the first half of the year to ensure consistent supply in the second half of FY17 and throughout FY18. While this has impacted cash flow in the short term, it will ultimately result in improved returns from beef sales in the coming periods.”

Related topics Meat

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