Tasmania looks into new abattoir for King Island

Date: 18.06.2013

A feasibility study released investigating the replacement of King Island's JBS Abattoir which closed last year

June 18, 2013

A feasibility study has been released to investigate options for the the replacement of
King Island’s JBS Abattoir which closed last year.

Funded by theTasmanian state government in partnership with the King Island Council, the report
says a new abattoir could be feasible and outlines the opportunities and challenges potential investors would need to overcome for a sustainable operation.

The closure of the JBS Abattoir was a significant setback to the King Island community and its economy.

Tasmanian Deputy Premier Bryan Green says the the partnership agreement is focused on priority issues for the community.

"[These include] transportation of stock and stock handling, identifying future shipping needs, working with local businesses to support economic growth and development, including tourism," Green says.

Study author Paul Troja
today told
ABC Radio a new facility would cost $30 million.

But Troja, also Director of consulting firm Felix Domus, says 75 percent of farmers on the Bass Strait island would have to commit to supplying animals for it to be viable.

The study says a new abattoir would have to process at least 31,400 cattle a year to cover costs and make a small 6 percent profit of just $840,000 a year.

A healthier profit of $1.9 million would require almost all of the island's beef cattle - at least 39,000 a year - to be processed locally.

Prior to its closure, the state-of-the-art JBS meatworks, King Island’s
only such
facility, processed 800 young local cattle a week to be sold as prime King Island beef.

Approximately 28,000 cattle per annum were managed locally, with the remaining 12,000 shipped to Devonport for processing at Longford or Smithton.

Shipping is also a vexed issue for the island, with Searoad Shipping and Logistics the the sole freight service for importers and exporters making one scheduled trip to King Island’s Port of Grassy per week.

This service could be threatened if Searoad’s current vessel, the Mersey, with a capacity of 4,000 tonnes, is put out of commission in favour newer vessels too large to dock at the Port of Grassy wharf.

The Mersey, which is nearing the end of its life, currently operates from Webb Dock at the Port of Melbourne in a triangular service, calling into Devonport and then on to the Port of Grassy.

If Searoad cuts its service to King Island, both
the import of bulk fuel and
the export of prime beef cattle could be impacted.

Deputy Premier Green says if
the concept of a new
abattoir for for King Island gains enough support from producers, a business plan will be commissioned and producers will start the search for an investor.

Green and Mayor Barratt say the Government and the Council will continue working together to find solutions.

"The Government will continue working with all stakeholders to help overcome the difficulties facing King Island following the closure of the JBS abattoir in September last year," Green says.

The state government has reportedly ruled out contributing finance to the proposed abattoir project.

Public comment is now being sought on the feasibility study.