Today's blog was written by grower Gary Walter from Cascade.
After a fantastic nights sleep in another great hotel it was a delayed start to the day with the bus running a little behind schedule. We toured back through the city viewing the stark contrast between the old centre of Guangzhou and the new on our way towards the SDL Guangzhou malt house.
We were met by Raymann Zhang, the Deputy General Manager of the Supertime malting company who gave us very detailed information on SDL and their malting operations.
SDL malt house is state owned under the banner of Guangzhou Holdings. The malt house has the capacity to produce 800,000 tonne of malt per annum which makes up 25% of China's market. This makes them the six largest maltster's in the world behind Malterup, Sourflett and Cargill the top three.
They were the first commercial malting company in China with production starting in 1989. SDL purchase about 900,000 tonne of barley each year with about 500,000 tonne coming from Australia.
CBH Group has been supplying barley to SDL for at least 15 years. They see Western Australian barley as preferable due to the 13-15 day freight journey compared to Canada's 19-21 day trip, as well as the ease of information, logistics and stability of supply due to our limited domestic market competition.
10 years ago 50% of barley used in malting was imported! now it is more like 80%.
SDL supply malt to all different breweries throughout China as well as exporting throughout all of south east Asia. Their customer base varies from variety driven to specification driven.
Starch, protein and colour are the specs they focus on with higher protein more benefit than lower. The varieties of choice are baudin, hindmarsh and bulloke, however they also use commander, vlamingh and bass blended together with FAQ (Fair Average Quality) barley. AUD $15 to $20 premium is the most they would pay for any variety or quality.
We then it taken on a tour of the Swiss produced Buhler type malting plant. This is a tall gravity feed system where the highest floors are the steep process where they germinate the barley using a water and mixing it over a five day period. It then moves down the building to the drying stage where they heat the wet grain to 50c for 18hrs then to 80c for 14hrs.
We can feel the heat which comes from steam produced at the power station which is right next door.
After this process it is bagged into 40kg bags and filled into containers or bulk filled into containers and taken to the customer by truck either or ship via the port that was literally 500m away.
It takes seven days for the whole process and they can produce 550 tonne each batch. One tonne of malting barley makes 800kg of malt with the wastage sold of as feed, mainly for poultry.
We are told the key to profits at each malting plant owned by SDL is it's location. Up country freight rates are high and the cost of getting barley in and malt out can vary dramatically.
We were then taken to a nearby restraunt where we were again fantastically hosted to a large meal. It was great to see the malt house up close and get a good understanding of how they operate and how they see Western Australian barley.
Raymann was really open and honest with his opinions on all topics to do with China - which hasn't always been the case at the places we have visited. It was interesting to note how closely they watch all crop and political conditions in Australia, particularly Western Australia.
From here is was off south on the bus towards Shenzhen. High rises are still under construction everywhere along this drive.
We are off to visit Shenzhen Four Gardiners - which is a major trading house here in China.
Upon entering Shenzhen we were met with colour of luscious trees and abundance of flowers, something we haven't seen much of in the harsher climates of the north. Shenzhen 30 years ago was farmland, now it is high rise and people everywhere with population of 15 million. There is also a fresh modern feel with new buildings surrounded by the trees and gardens. A generally better aesthetic feel.
We arrived at reception of Four Gardiners where we were met by Lu Limin, Director and Vice General Manager. From there it was off to the board room where we were given a run down on their very professional operation, mainly importing of commodities. All up there is 20 kinds of commodities with wheat, corn and sorghum being the main ones.
Corn imports have gone from 100 million tonnes 10 years ago to 210 million tonnes now. In a similar time frame China have gone from exporting sorghum to importing 60 million tonnes of it with a huge potential for growth from all feed grains expected.
Four Gardiners did express their concern about the consistency of quality of Australian wheat citing they had experienced hard Kernels amongst ASW wheat and low proteins which has been affecting their ability to produce gluten.
However, I feel that this is a slightly inconsistent message to others we have spoken to on this trip and maybe they need to pay for the quality specs or protein they actually want.
We were then treated to another amazing feed at a huge restraunt with a traditional Shenzhen banquet. The food all trip has been amazing and this was no exception however feel a plain old steak and salad might have to be on the cards shortly.
Afterwards the girls were treated to some local shopping and the blokes retired home to bed.
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