China's feedlot and abattoir project is under constructing and it will be ready around 2017 April - May. It takes only 1 year to get the first feedlots and abattoirs project done is already very quick. By then this site located in He Bei Cang Zhou funded by Wellao and Fulida Group will have the process 250000 cattle per year's ability. Another site could located in Zhe Jiang province. These two sites are covered two major well developed areas of China. The location for these two projects are selected very carefully.
Live cattle and fresh meat is always preferred by Asian customers compared to frozen ones. Processed in China is much cheaper than processed in here. Chinese customers even consumes the inner parts of each cattle including the tongues and stomachs for hotpot dishes for example. The joint venue will make much more profit as these are the bonus. The business is inline with the politics and Chinese government is trying to bring high quality and none injected water meat for the people. FTA is assigned and is aimed for a long term and stable protein source and the tax decreased to 0% is another bonus.
Fuel cost is more likely stay a reasonable low price for a longer time due to the Shale Oil Industry in US puts a long term burden for the crude oil re-bounce.
You can see some support from the founders of the shearer and delay the debt payment date for a longer time. A Chinese insurance company willing to insure this deal also shows some support from their side.
Even the latest news for the Japan suspend aussie live cattle import is not 100% bad for WLD since it will remind the company to be aware of this type of incidents happen again. It's good for a long term business run.
US interest rate hike cycle seems to be a really long term process. USD is more likely to be relatively strong for a long run. This is not too bad for WLD as the cattle is prized in USD. Lower AUD is good for any export companies. WLD is the one.
WLD Price at posting:
59.5¢ Sentiment: Hold Disclosure: Held
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