STONE Axe Pastoral Company has moved a step closer to building its vertically-integrated full-blood Wagyu enterprise at its Cheviot Hills property, north Kojonup.
Leading investment manager Roc Partners (Roc) has purchased a major shareholding in the business for an undisclosed amount.
Stone Axe Pastoral Company was founded by Cicero Group founders Mathew Walker and James Robinson in 2014, with a vision to create a purpose-built 30,000 head capacity beef abattoir and 20,000-head capacity beef feedlot, with a full-blood Wagyu breeding herd to supply domestic and international markets.
Roc is a leading alternative investment manager, specialising in private equity in the Asia Pacific region.
It was established following the management buy-out of the Macquarie Group’s private markets business unit by its senior executives in June 2014.
Roc manages more than $4.6 billion of assets, predominantly on behalf of Australia’s leading superannuation funds.
The equity from the deal will help progress Stone Axe’s ultra-premium beef cattle enterprise.
Mr Walker told Farm Weekly that Roc’s investment followed an extensive appraisal and due diligence process.
“This commitment, from one of the pre-eminent investment managers in the Asia Pacific region, is deemed an endorsement of the business model and commercial opportunity,” Mr Walker said.
“We are delighted to welcome them on board.
“We are particularly delighted to have received this equity support from Australian superannuation funds, which have historically been limited participants in the agriculture sector, allowing the company to remain in Australian hands.”
Roc partner and now Stone Axe chairman Michael Lukin said the company was delighted to partner with the Walker family and its plans to develop a world-leading, ultra-premium beef business
“The Walker family pioneered the Australian Wagyu industry and their original full-blood Wagyu herd imported from Japan accounts for over half of all full-blood Wagyu animals to ever leave the country,” Mr Lukin said.
“We believe the long history of the Walker family in the Wagyu industry, combined with equity investment from patient, long-term investors in Australian superannuation funds, will create a highly successful, market-leading business.
“We also believe there will be further opportunities for capital investment through the Stone Axe platform as the popularity of the Wagyu breed continues to grow.”
After gaining approvals last year, the company has been focused on the Roc investment deal and storing several thousand Wagyu embryos for the past six months.
The Wagyu beef production company already has planning approval for a 20,000-head capacity beef feedlot at the Cheviot Hills property, which was purchased in 2016, to build a feedlot and abattoir with high animal welfare standards.
Kojonup shire accepted the company’s proposed scheme amendment to accommodate a processing facility without modification and other associated uses on a portion of the property.
Mr Walker said the company hoped to submit more plans to the shire in September for the proposed abattoir.
He said the works approvals, building approvals and construction phase would take some time, and in the meantime they were focused on building the herd and acquiring more Western Australian properties.
In 2014 the Cheviot Hills property was granted a 634 megalitre groundwater licence from the Department of Water and in 2016, obtained works approval for a feedlot from the Department of Environment Regulation.
Stone Axe has committed $25 million to build the feedlot and the abattoir would be a further large-scale investment.
The company’s abattoir plans include processing capability which would initially be open to local beef producers.
Other land purchases, possibly in the South West, will be used for backgrounding full-blood Wagyu and housing the donor recipient herd.
Up to 2000 embryos will be transferred in the company’s proof-of-concept program, which is expected to start in spring and be trialled for a year before a full-scale ramp-up.
The first donor recipients transplants at Kojonup will start this spring.
In New South Wales, the company has an active donor herd of more than 300 females, with its first embryo calves being delivered earlier last year.
The unique program sees Stone Axe fullblood Wagyu embryo calves with Angus mothers, which Mr Walker said were perfect mothering types.
“A cow can produce about 20 embryos per month,” he said.
“We are in a hurry to ramp up our numbers.
“We intend to intensify our model to about 5000 transfers a year when we crank up – globally no one is doing this.”
Stone Axe’s breeding lines trace back to when Mr Walker’s father Chris pioneered the first bloodlines in Australia by purchasing and exporting 87 fullblood Wagyu cattle out of Japan during the 1990s.
Using the same breeding line, Stone Axe plans to build up a big breeding herd and process about 30,000 head annually of WA premium fullblood Wagyu.
The donor herd will stay in NSW, but frozen embryos will be transported to the recipient herd in WA.
Subject to approvals, the company hoped that by 2022 the abattoir would be running at full capacity with ultra-premium beef from certified grainfed Angus and fullblood Wagyu and local cattle from neighbouring producers.
Mr Walker said the company had gained a lot of support from the local shire and community.
“This investment secures the financial future of the business and is a major step forward in the execution of the vision conceived only three years ago,’’ he said
“We look forward to continued constructive engagement with all relevant authorities and community entities to see the project materialise.”