EFF red-hot in China

And South Australian products such as Thomas Foods International's Clare Valley Certified Australian Angus and Murraylands Lamb brands; and Bultarra Saltbush Lamb, Port Augusta, have helped drive that growth.

EFF general manager Craig Aldous, who spoke to woolgrowers recently as part of the 2014 Elders China Wool Tour, said the company had boosted profits and were forecasting year-on-year growth of 20 per cent to 25pc in the next three years.

"I think we can double business in the next three to four years," Mr Aldous said.

"We're a $20m turnover business in food service and back home in Australia that is quite a significant business.

"It's a significant business here too in the niche section that we operate in at the top-end of the market."

Mr Aldous said despite the ban on chilled meat imports last year - which had made up the majority of what they offered - they had continued to grow by exporting frozen shipments.

"We try and stick to brands where we can get exclusivity as we're focused on high-end channels," he said.

"We need exclusivity around brands because we can't have a local wholesaler coming in with the same product ¥2 a kilogram cheaper.

"We have a portfolio of exclusive brands, TFI; Greenham in Tas, with their Cape Grim Beef and Robbins Island Wagyu; Strandbroke's, Grantham, Qld, Diamantina Wagyu and Diamantina Platinum Grainfed and Northern Rivers Veal, Casino, NSW."

Meat used to produce burgers came from Swift, Teys or TFI, dependent on price.

"Processing sausages and patties, cutting into portion sizes or leaving as whole piece primals, and distributing to hotels, restaurants and supermarkets all around China is 90pc of our business," Mr Aldous said.

He said Australia's clean and green image had been a positive for business.

"Most Chinese people want to know where product comes from, where it is packed and how it is labelled," he said.

"Children are revered here - because they generally only get one (this recently increased to two) - the fallout from the melamine milk powder scandal was massive.

"The Chinese want to know what they and their children are eating is safe."

While in the past EFF had also sold olive oil, dairy, seafood, beer and wine - including several South Australian labels K1 by Geoff Hardy and Pertaringa - these sections were soon to close so the business could focus on its core strength, red meat.

Mr Aldous said while a free trade agreement (FTA) between China and Australia could provide benefits, his biggest concern was the large quantities of beef being smuggled in over the borders into China.

These products had a 29pc price advantage over EFF goods, who had to pay a 12pc tariff and 17pc value-added tax on any products imported to China.

"We need to set up the right protocols to benefit from a FTA," Mr Aldous said.

"There's an opportunity there as well for the live export trade.

"The size of the Chinese herd is decreasing even though demand is increasing.

"China is a net importer of beef which reflects that demand is outstripping supply."

While the head office remains in Shanghai, the company also had offices and warehouses in Beijing and Guangzhou.

Sales are split - with 60pc of product sold to eastern China, 20pc to the north, 15pc south and 5pc west.

"The split is about 45pc to hotels, 35pc restaurants, 15pc retail-supermarkets and 5pc wholesale," he said.

"We deliberately don't try to sell to wholesalers in China, our business model is very much a direct model.

"We buy direct from Australian abattoirs and sell directly to hotels and restaurants here because we want to maintain our brand integrity.

"Chefs in the market here know that when they buy from Elders it's real product at a real price which means we're not always going to be the cheapest price, but its quality and its consistent and there are not shortcuts."

Investment in the logistics sector in China has meant that EFF will soon outsource their warehousing.

"These facilities are six stories high, all machine operated, with everything barcoded and computerised," Mr Aldous said.

"We can be sitting in our office, jump on the computer and get 100pc accurate inventory figures.

"Everything is managed, first-in is first out, and that sort of accountability and transparency will eliminate any losses and therefore be able to improve the measurement of processing yields."

Imported lamb consisted of lamb racks.

"We do lamb - but about 90pc of our imports are beef in our meat category," he said.

"Because we are at the top end of the market in China we're dealing with brands like Shangri-La, Ritz-Carlton, Sheraton, Hyatt, InterContinental, and they're all predominately buying the lamb rack and paying a premium for it.

"Here lamb is considered more popular in the manufacturing sector, as breast and flaps for the hot pot market (a popular Chinese dish), than the premium sector."

In comparison EFF sold score nine Wagyu for up to $200 a kilogram to restaurants. This could then cost the consumer up to $300 a steak.

"A 100-day grainfed product would be the core of our program," he said.

Miranda Kenny travelled to China courtesy of Elders as part of the 2014 Elders China Wool Tour. Visit stockjournal.com.au for more stories from her trip.