Australia’s Westpac bank sees a full plate in China’s food deals

Workers move cattle carcasses from the cold room to the boning room at a Bindaree Beef facility in Inverell, Australia. With funds from selling a stake in the business to a Chinese meat processor, Bindaree says it could double its daily cattle cull to 2,400. Photo: Bloomberg

Workers move cattle carcasses from the cold room to the boning room at a Bindaree Beef facility in Inverell, Australia. With funds from selling a stake in the business to a Chinese meat processor, Bindaree says it could double its daily cattle cull to 2,400. Photo: Bloomberg

Australia’s Westpac sees opportunities in China’s growing appetite for Australian beef and seafood.

The 199-year-old Australian lender is trying to take advantage of China’s growing investment in Australia for high-quality food, property and supply chain, two executives of the bank said in an interview during the 2016 Australia Week in China.

China’s biggest personal computer maker Lenovo has recently bought a Perth-based seafood processing firm. China’s richest man, Wang Jianlin, last year acquired Australia’s largest cinema chain while a Shanghai-based dairy firm has been expanding food distribution operation in Australia after its takeover of Manassen Foods five years ago.

Westpac has been playing an active part in the deals, part of a rising tide of investment flows from China to Australia.

“We are seeing… a lot of growth and a lot opportunities for Chinese companies in our home markets of Australia and New Zealand,” said Andrew Whitford, regional head of Greater China at Westpac. “We want to be the dominant player up and down the China corridor” to facilitate such flows, he said.

China’s investment in Austria last year rose 60 per cent in Australian dollar terms, show data in a report by KPMG and the University of Sydney. Australia was the second-most favourite destination for Chinese investors in the last decade, next to the US, according to the report.

While real estate dominated Chinese investment in Australia last year, at 45 per cent, Chinese money is also diversifying from mining to other businesses, notably in agriculture. There were 12 agriculture deals last year worth AUD$375 million in dairy, beef and cotton, the report said.

Bala Swaminathan, president of international businesses at Westpac, said he saw a trend shift “from mining to dining” in Chinese investments into Australia.

China’s earlier investments aimed at securing mineral supplies from Australia have suffered huge losses and China’s purchase of houses and infrastructure is raising eyebrows in the country. Questions are also being raised on whether Australia should increase its exposure to China at a time when its economy is slowing down.

China’s imports from Australia fell 30 per cent in US dollar terms in the first quarter of this year from the same period last year even though a Sino-Australia free-trade pact came into effect in December.

Australian Prime Minister Malcolm Turnbull led about 1,000 business delegates to China last week, in a sign of the country’s commitment to growing trade and economic ties with the world’s second biggest economy.

For Westpac, which established a Shanghai branch in 2008 and now has a headcount of about 90 in Shanghai and Beijing, it’s a trend to be cashed upon.

While the bank’s traditional job is to help Australian businesses “navigate” in Asia, the trend has reversed in the last three or four years, said Swaminathan. “It’s not so much Australia out as China in…a bulk of our clients are now Asian companies as opposed to Australian companies, so there’s a big shift in our businesses.”

Source: SCMP “Australia’s Westpac bank sees a full plate in China’s food deals”


3 Comments on “Australia’s Westpac bank sees a full plate in China’s food deals”

  1. Joseph says:

    Westpac is one of Australian four big banks well known to their treacherous activities. Whatever their motives are usually questionable. While their exploit is well-known infamously to Australian, they may hope that naive Chinese may not know. Westpac has been having trouble to establish itself in Indonesia because of the dodgy dealing with Indonesian in Australia had damaged their reputation so much.
    Australia is a treacherous place for Asian to invest if you are not Indian. The Australian has bizzare affinity toward Indian in the hope that the Indian would someday rival China in economy. They call it ‘Indian Miracle’. Better to suck Indian than to suck the Chinese. The Australian has been known to block Chinese investment for ‘nationalistic’ reason but would willing to spend big, even damage their famed Great Barrier Reef only to gain favor for ‘potential’ Indian white elephant project.
    Australian erratic politicians are something to be watched for. In the past, the had stop lucrative beef export to Indonesia on wimps, and demand it to be reestablished at their own convenience. They had blamed Chinese from China and SE Asia for sky high property price when the culprits were property bargain hunters from India and Europe. Australian baby formula producer had been known to starve their own domestic market of needed supply only to make point that Chinese in Australia were selling baby formula online to China and made profits. Strangely, they’d been jealously campaigning to take Chinese baby formula market from dominant New Zealand. They blamed China when their steel factories fired workers only because China won’t buy their steel. They even blamed China for tainted berries imported from Peru. And the list go on. What the Australian need is actually proper education on attitude and customs of its neighbor before doing business. Gosh they don’t even know anything about SE Asian and they are located in SE Asia.


    • James says:

      Given time, Australian will become the “white trash” of Asia. Manufacturing in Australia has been hollowed out for years. A country that have 4 PMs in five years. A country whose politicians looks to ways and means to get re-elected after a short three years term,rather than governing for the betterment of the ppl. A country that “talks” about building a fast train from Melbourne to Brisbane for years. Just talk.
      A country that uses more resources to do less. A wasteful society whose population is dependent increasing on welfare to retire. A country that’s not certain which way its future lays. A sad case of a lost child. Wasted opportunities that been lost….


      • Steve says:

        True – Aussieland is getting too expensive to live. Tradesmen like plumbers, electricians are like hungry crocodiles, over-charging. If the average Aussie has no adequate superannuation,
        own a house freehold and car by aged 60 years, he or she is stuffed. Maybe not an Aussie woman, she can still have her 60 years old breast augmented, facelift, botox and tightened elsewhere, she can still con a well to do retiree hooked on Viagara. With 5 PMs in 5 years, there is a chance for a 6th PM in six years with Bill Shorten. Problem with the Aussie Politicians, they are All hooked on US alliance with no mind of their own.