Australia's beleaguered live cattle export business received a double boost when a state-owned Indonesian business revealed it was mulling a major investment, hours after RuralCo unveiled its entrance into the sector.
PT Rajawali Nusantara Indonesia revealed that it was considering five Australian cattle groups as potential targets for investment, in a deal which could see animals heading to Indonesia under its banner early next year.
"We plan to acquire a cattle breeding firm in Australia that has between 50,000 and 500,000 head of cattle to help meet demand for beef and live cattle," Ismed Hasan Putro, the company's president director, told the Jakarta Post.
The herd size being talked about is, in theory, not too far short of that of Australian giant AACo, which had a herd of 680,000 head as of the end of last year.
However, taking control of AACo, with a market capitalisation of $476m, is well beyond the firepower of 350bn rupiah ($30.5m) that PT Rajawali Nusantara Indonesia is reported to have set aside.
The announcement came hours after RuralCo, Australia's top rural services group, revealed that it was entering Australian live cattle exports, with the company's chief executive, John Maher, confirming that it had poached seven staff from struggling rival Elders.
"We have always been big in supplying cattle for trading," Mr Maher told Agrimoney.com.
"Now we are going into exports as well. It fits in with our strategy of growing by diversification, and is complementary to our existing business."
While Australia's live cattle trade had suffered a "hard time", thanks to restrictions placed on shipments to top customer Indonesia amid animal welfare concerns, Mr Maher said he was "confident" over the industry's prospects.
'Bring them on'
Tony Abbott, Australia's prime minister, on Tuesday ended an official visit to Indonesia, his first following his election, in which he promoted trade ties and, signally, underlined the potential for Indonesian investment in Australian agriculture.
"If some Indonesian joint ventures in cattle are an important part of getting this trade restarted, well, please bring them on, bring them on," said Mr Abbott, who has pledged enhanced scrutiny of foreign investment in Australian agriculture.
Land acquisitions, particularly by Chinese companies, feared stockpiling agricultural assets to help meet the countries huge food import needs, are especially sensitive.
Gita Wirjawan, the Indonesian trade minister, signalled his country's interest in Australian land, saying that: "We do have a need for more protein in the future, and the lack of acreage in Indonesia I think points to the direction where we need to be in search of more acreage."
Australia's government suspended live cattle exports to Indonesia, a trade then worth Aus$300m and with a volume of some 500,000 head a year, in June 2011 following a documentary showing animal cruelty in the Asian country.
While the ban was lifted a month later, it has suffered since from tougher Australian government curbs, and a sharp drop in imports permitted by Indonesian authorities.
AACo, historically one of the major cattle exporters to Indonesia, last month unveiled an Aus$299m capital raise to pay down debt and fund its expansion into beef processor and exporter, a strategy prompted in part by the headwinds in live cattle shipments.