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Chinese conglomerate Pengxin wants two cattle farms in Australia

Staff writer |
Chinese conglomerate Shanghai Pengxin Group is set to become the largest farmland owner in Australia if it is successful in the acquisitions of two cattle farms for A$1 billion ($720 million).

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The Shanghai-based company has placed separate offers for Consolidated Pastoral Co and S Kidman & Co, two of the country's largest beef producers, according to the Australian Financial Review newspaper. If the acquisitions are successful, Pengxin will create a cattle powerhouse that would own more than 1 percent of the Australian continent, according to the report.

CPC's farms, mainly located in northern and western Australia, are focused on supplying beef to Asian markets, particularly to China and Indonesia. CPC has about 375,000 heads of cattle and owns 0.75 percent of Australia's land mass. S Kidman, with a herd of 185,000 cattle, exports meat to the United States, Japan and Southeast Asia.

The ongoing shortage of cattle in China has led to a quest for new suppliers, with Chinese companies investing overseas to meet the growing demand for red meat and dairy products.

China's beef imports are expected to grow by 12 percent this year from a year ago, according to a report published by research firm Business Monitor International.

Higher disposable income for food purchases and changes in people's diets are the main reasons for the increasing beef imports.

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