South Australian premium meat exporter Thomas Foods International has signed a deal worth up to $60 million per year with a major Chinese food distributor, as the trade relationship between Australia and China strengthens.
The Memorandum of Understanding (MoU) between the two companies was signed to “express their mutual commitment to fostering business opportunities”.
The agreement comes only weeks after Thomas Foods International (TFI) managing director, Darren Thomas, and chief executive officer, Tony Stewart, joined Premier Peter Malinauskas on a business delegation to China.
The MoU commits to a target of annual red meat exports of $AU30 million by the end of 2024. The agreement also sets out to actively seek and identify new and additional business opportunities beyond this target.
In addition, should TFI’s brand new state-of-the-art beef processing facility in Murray Bridge achieve a China market listing, the MoU states the chilled and frozen red meat export target will increase to $AU60 million annually, highlighting the potential for increased trade because of its commitment to meeting China's exacting market demands.
In 2018, TFI’s Murray Bridge facility was destroyed by a fire which impacted the company’s production capabilities. However, the local business maintained long-term relationships with its overseas trading partners as it embarked on the construction of the new facility.
The new facility represents a major investment and was specifically designed and constructed to exceed the highest standards required for the Chinese market.
Earlier this year, trade impediments on Australian barley and hay imports to China were lifted.
Following this, the Commonwealth and Chinese Governments agreed to a pathway to lift Chinese tariffs on Australian wine – which have been imposed since 2020.
Prime Minister Anthony Albanese, Federal Foreign Affairs Minister Penny Wong and Federal Trade and Investment Minister Don Farrell also recently visited the country.
Progress in the trading relationship with China, which is Australia’s and South Australia’s largest export market, is credited to a concerted effort by the Australian Government.
China continues to be South Australia’s top export destination for merchandise, up 48 per cent for the year ending July 2023 to $2.8 billion.