SE Asian importers allay concerns

25 Mar, 2015 01:00 AM
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SOUTH East Asian grain importers are willing to pay appropriately for quality Australian wheat, a contingent of WA growers was told on a recent visit to the region.

Sixteen grain producers visited flour mills and food production facilities in Vietnam and Indonesia as a part of a CBH study tour this month.

While the group raised their concerns about less expensive and lower quality grain being available from other locations, their concerns were allayed by local importers.

CBH media adviser Nikki Wilson-Smith attended the tour and said regular grower tours were used to connect growers with their grain beyond their paddock and the bin they delivered to.

"It's not all that often that growers get to meet the people who buy their wheat or make products from it," she said.

"We feel it is really important for growers to get an opportunity to get a firsthand look at why WA grain is an important commodity and why the end users value it.

"To get the direct feedback is a really valuable exercise."

South East Asia's growth and growing interest in flour over rice was a key highlight throughout the tour, with consumption consistently increasing by about five per cent each year.

In 2014, Indonesians consumed 21.5 kilograms of flour and Vietnamese citizens 11.4kg, rising from 18.2kg and 9.6kg respectively in 2010.

Consumption is expected to reach 33.5kg per person in Indonesia and 17.4kg per person in Vietnam by 2020.

With populations of 89.7 million in Vietnam and 249.9m in Indonesia, growers had the importance of their on-going quality grain growing impressed on them as vital for the future of the region.

Ms Wilson-Smith said the opportunity for growers to hear from people on the ground in Asia about the projected growth, the need for stable supply and for quality grain was valuable.

She said the trip offered great insight into CBH's Interflour investment and what is happening on the ground in the region.

"It was really important that we got to see Interflour Vietnam and the Golden Grand Flour Mill to allow growers to directly learn about the investments made by CBH here, which is owned by these growers," Ms Wilson-Smith said.

"It was so valuable for them to witness the growth opportunities there and how these businesses are run.

"The products are the end point. There are so many steps in between the growers and that point, it was brilliant to make the connection along the entire supply chain."

The contingent began their journey by visiting the Interflour Vietnam Cai Mep flour mill and port site to view a facility that CBH part owns with the Salim Group.

The site has a milling capacity of up to 1000 tonnes a day or 250,000t a year and is located on the Mekong River with easy access to shipping routes.

Since 2004, CBH has invested almost $100m in securing its 50 per cent stake in Interflour, where 76pc of the wheat used is sourced from Australia.

Heineken brewery's Vietnam site hosted the growers, where an insight into the growing requirement for malt was given.

Supply chain director Paul Blejis outlined the plant's growth, from producing 30m litres of beer annually in 1991 to 420mL in 2013, with demand continuing to grow.

In a unique opportunity, the study group was able to visit the Elders Indonesia feedlot on the island of Sumatra in the region of Lampung.

Operations manager Jason Hatchett provided his experience within the local industry since the introduction of the livestock Exporter Supply Chain Assurance System (ESCAS) in July 2011.

He said the integration of new methods within the local industry to meet ESCAS requirements was pleasing as Indonesians respected regulations in order to continue receiving Australia's quality cattle.

The final few days of the study tour encompassed visits with several users at the end of CBH's supply chain, particularly Indofoods.

As both a key importer of Australian wheat for milling in its Bogasari mills and of flour for its wide range of consumer products, including noodles, Indofoods provided the tour group with the chance to taste test the final product.

The final visit of the tour featured the newly purchased Interflour mill, Golden Grand, at Cigading Port in West Java.

While the site is undergoing extensive renovations, its strategic value was highlighted to growers as a valuable way point on the freight trip to Interflour's Malaysia sites.

p The reporter travelled to Vietnam and Indonesia courtesy of CBH.

p A special feature on the tour will appear in next week's Farm Weekly.

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