A PARTNERSHIP between a Perth-based businessman and a major Chinese importer of deer horns is aiming to increase the quality of the local product, boost revenue for farmers and secure a fairer price for buyers.
Bindoon Valley Farms managing director Dr Desmond Williams, who is also an orthopaedic surgeon and national vice-president of the Australia China Business Council, has teamed up with Tieling Jida Deer Products Processing Co Ltd manager Mr Zhang Chunqing to increase access to the lucrative Chinese market for deer horn.
To date, deer horn, or velvet antler as it is known, has been bought through merchants in Hong Kong and sold to producers of traditional Chinese medicines.
The problem, according to Dr Williams, is the significant mark-up of the prices by the Hong Kong ‘middle men’ before the product is sold to the Chinese buyers.
Dr Williams says that, under the current system, farmers have very little negotiating power with the Hong Kong merchants, while the Chinese buyers are often paying exorbitant prices.
He said that dealing directly with the buyer rather than using a middle man would benefit farmers and the producers of the traditional medicine by ensuring a better quality product and a fairer price for both sides of the equation.
“In China, the total cost of keeping a deer and producing product is 1500RMB, the equivalent to $A300 per year per animal and the return is about 4000RMB, which is about $800 per year per animal,” Dr Williams said.
He said Mr Zhang’s expertise and access to the distribution network would help those in the WA market replicate those profit margins.
“Mr Zhang has expertise in farming technologies with genetics and feeding,” Dr Williams said.
“In Australia, the average weight of velvet antler is 2.5 kilograms per deer per year, but in China the average is up to six kilograms per deer per year — more than double Australian production. Velvet antler is highly regulated by a velvet grading system that has been developed in New Zealand and is recognised worldwide.”
China was the largest market for velvet antler, followed by South Korea, Hong Kong and Taiwan, he said.
New Zealand is the largest producer of velvet antler with about 50 per cent of the market, followed by Russia, China, Canada, Australia and to a lesser extent the US.
While Australia wasn’t significant in the international deer antler market, it had a lot of potential, according to Dr Williams.
“Currently we can’t promote the industry to other farmers because they don’t get the prices promised until we have someone like Mr Zhang,” he said.
“Once you bring in a major buyer who can buy direct from a farmer it eliminates the middle man who is currently taking a substantial profit, so there is benefit for the farmer and the buyer.”
Dr Williams said the establishment of long-term cooperation protocols would result in greater access to China markets and an increase price for WA farmers.
“Mr Zhang intends to help the deer farming industry in Australia and can help Australian farmers to gain more market share in the international market,” he said.
“He has major distribution channels for processed velvet antler in China, Hong Kong and Korea.”
Velvet antler is grown on stags from September to December. It is clipped from the animal, which is able to continue growing commercial grade velvet antler for up to 20 years.
“Velvet antler is mainly cartilage and is the most rapidly growing tissue in the animal world — up to 1cm per day,” Dr Williams said.
“There are some unique biochemistry and genetic properties in velvet antler.
“Velvet antler is one of the great Chinese traditional medicines and it has stimulant properties, properties to build up stamina and properties as an aphrodisiac.”
Dr Williams said Australian research had identified velvet antler as a potential treatment for arthritis.
“We are seeing a real increase in traditional Chinese medicines in Western countries,” he said.
Dr Williams said the skills transfer between buyers such as Mr Zhang and WA deer farmers was possible through the new visa system introduced in March 1 this year.
“Mr Zhang will visit Australia on a 456 short stay temporary business visa to offer consultation and advice, but he can’t work on this visa. Then we will explore further options that include a multiple entry business visa or investment in a joint venture in a regional area,” he said.
“He’s going to help us to set up a factory in Bindoon, with assistance from the Wheatbelt Development Corporation, which will assist in obtaining an employer work-sponsored visa for a technician to be employed at the factory.”
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