February 26, 2018

An investment fund started by the government of New South Wales in Australia has taken an A$3.3 million stake in Stone Axe Pastoral, a Wagyu beef agribusiness. The company’s goal is to breed the largest full-blood Wagyu cattle herd outside of Japan.

The GO NSW Equity Fund was created to provide support for expansion to small and medium-sized companies, with the ultimate goal of job creation. The fund is a partnership between the NSW Government, Australian superannuation funds First State Super, which allocated an initial A$100 million, and private equity investment firm ROC Partners. The Government’s “Jobs for NSW” initiative subsequently added a further $50 million to the fund. Any returns or profits generated by the fund’s equity stakes are reinvested in the fund itself.

Wagyu beef is sourced from any of four Japanese breeds of beef cattle, and is known for its intense marbling and high price. Significant markets for Wagyu beef include Hong Kong, the U.S., Singapore, Cambodia and Thailand. (Meat and Livestock Australia report, 2015). Recent years have seen declining slaughter of Wagyu steer in Japan, trending with overall pressure on beef from competition from other protein sources (USDA, 2016).

Stone Ax Patoral is a fully-integrated operation, allowing it to manage costs, and is located close to Asian export markets.

By David Nitchman, GAI Media