- A government’s new $150 million equity fund has just made its first investment
- Agribusinesss Stone Axe Pastoral wants to become the biggest producer of wagyu beef outside of Japan
- Wagyu is highly prized by chefs and gourmands and can sell for hundreds of dollars per kilo
The New South Wales government is backing a Western Australian cattle business keen to become the country’s biggest wagyu beef producer, tipping a $3.3 million investment into the Stone Axe Pastoral Company as it expands into NSW.
The money is the first investment from the $150 million GO NSW Fund late last year, which was launched last year. First State Super and ROC Partners are fund partners with the state government.
Deputy premier John Barilaro said $3.3 million stake in the agribusiness’s new venture in Ebor, on the Northern Tablelands, is expected to create 76 full-time jobs over the next five years.
The regional NSW minister said the GO NSW Fund is an Australian-first, giving the state government the ability to take an equity stake in businesses with high-growth potential.
“Today’s equity deal is a co-investment of $3.3 million from the NSW Government, together with $6.7 million from First State Super, that will give Stone Axe Pastoral the capital it needs to ultimately breed the largest full-blood wagyu cattle herd outside of Japan,” he said.
Stone Axe takes its name from Kojonup, an Aboriginal word and town 260km south-east of Perth, where it has a $25 million project planned for a 20,000 head feedlot and integrated abattoir. The company has a fullblood Wagyu donor herd is located at Holbrook Vet Centre in NSW.
Last year, Stone Axe bought the 2145 hectare aggregated property, Glen Alvie, in Ebor for an undisclosed sum after it was passed in at auction for $17.5 million. The company plans to run around 2000 full-blood wagyu on the property.
Wagyu is a Japanese breed, also known as Kobe beef after the region where it’s grown. It can be heavily marbled with highly prized intra-muscular fat that makes it the world’s most expensive beef. One Sydney butchers sells cuts for $450 per kilo.
Wagyu is popular in Australia. Victorian producer David Blackmore’s full-blood wagyu is highly prized by chefs around the world, including Neil Perry, who makes a luxe burger with it at Rockpool Bar & Grill.
But much of what’s sold as wagyu in Australia is what’s called F1 – crossbred animals, for example, wagyu bred with Angus cow for a 50/50 breed, which has seen even wagyu even offered in fast food restaurants.
First State Super Chief Investment Officer Damian Graham called the Stone Axe Pastoral investment “strong and sound”.
“This Fund is all about delivering positive social benefits, while also maximising the growth potential of small to medium-sized businesses to deliver good returns to our members,” he said.
Scott Richardson CEO of the agribusiness said the funds we go towards expansion plans in the region.
“The investment means we will be able to continue to build on our existing full-blood wagyu breeding program in some of the best cattle country in Australia, as well as look at other strategic opportunities to invest further into the supply chain as part of our overall paddock to plate strategy,” he said.
The cattle business has attracted several billionaire investors in recent years, with mining billionaire Gina Rinehart snaring a large part of the giant S. Kidman & Co empire in 2016 through her business Hancock Beef, while fellow WA billionaire Andrew “Twiggy” Forrest has also bet tens of millions of dollars on beef exports to China, via his Minderoo Group.
Seven Group chairman Kerry Stokes and retailer Gerry Harvey have also invested in beef export businesses.
The domestic and export value of the Australian beef and cattle industry generated nearly $17 billion in revenue last financial year.