An abattoir built to service small farmers and potentially game and native meats would cost upwards of $57 million to build and have capacity to process 500 sheep per day.
The study into the viability of Small Farmers WA’s proposal to build and operate a service kill abattoir near Mount Barker found there was demand for such an offering in a region where paddock-to-plate farming is on the rise.
That study has given its backers the impetus to progress further studies and start gauging investor interest via BDO’s venture capital networks.
Small Farmers WA chief executive Patrick O’Neill said the collective’s first study found cattle and sheep meat would likely underpin the facility.
“It is at pre-feasibility level and is a body of work which casts a very broad net in terms of exploring what opportunities are out there, what market is addressable and how we might position ourselves strategically to come up with a system which is going to be viable,” he said.
“Out of that study has come a range of findings or ideas where there's not going to be any traction whatsoever, for example pork processing - there's not the addressable market to justify the complication of adding pork into the mix, but also the opportunity cost that represents in terms of halal certification.
“In financial terms, the feasibility has gone through and tested three scenarios, optimistic through stressed, with further refinement in strategy, ie processing mix we should be able to improve that performance.”
Mr O’Neill said Small Farmers may now look to study the merits of processing poultry, game meat, and native species such as kangaroo at the facility as well.
Currently, almost all kangaroo for human consumption in WA is imported from the east coast.
Business News has spoken to several high-profile local chefs in recent months who have all indicated an eagerness to use domestically sourced kangaroo meat.
Small Farmers WA has entered a contract with Development WA to acquire land at the Yerriminup Strategic Industrial Area to build the abattoir.
That will result in either the purchase of the land or a lease should sufficient funds not be raised.
The planned abattoir would run parallel processing lines for cattle and sheep which could operate independently.
As far as numbers are concerned the study pointed to a $34m to $57m build cost, a need for 50 to 75 staff to operate the facility, and for an initial processing capacity of 500 sheep or 60 cattle per day.
While Small Farmers WA was set up by a collective of farmers, the abattoir would be run as a business rather than a co-operative to attract investors.
“I am passionate about making this business owned and governed as much as possible by farmers because they're the ones that are going to have the aligned interests when it comes to governance decisions,” Mr O’Neill said.
“We won't end up quite as quickly down that incumbent abattoir path where interests of the producers aren't necessarily at the forefront, which is particularly relevant in the service kill space.
“However, it is a capital-intensive project and ultimately is unlikely to be funded entirely by farmers alone which is precisely why we steered away from a cooperative model to a very standard company model.
“We're going to need to attract investors that are looking for a standard return and investment model versus the cooperative model.”
The feasibility study was funded by a state government grant.
