Execution Risks Loom as Aumake Partners with Chinese Giant on Hay Export Project

Strategic Partnership Formation

Aumake Limited (ASX – AUK) has taken a significant step in expanding its agricultural footprint by entering into a non-binding Cooperation Framework Agreement with Sinomach Hainan Development Co., Ltd. This subsidiary of China National Machinery Industry Corporation (Sinomach) represents one of China’s largest state-owned conglomerates and a Fortune Global 500 company. The partnership is notable as Sinomach’s inaugural commercial venture in Australia, signaling a deepening of bilateral agricultural trade ties.

Project Scope and Ambitions

The collaboration aims to develop an integrated premium hay supply chain, initially cultivating approximately 3,000 hectares of land in Australia. The plan is to expand this footprint to 20,000 hectares over multiple phases, targeting an annual production capacity of 300,000 tonnes of high-quality hay. This scale positions the project as a major player in the forage export market, directly addressing China’s increasing demand for premium animal feed.

Roles and Responsibilities

Aumake will manage all Australian operations, including land acquisition, cultivation, processing, environmental compliance, and export logistics, ensuring adherence to stringent Australian regulatory standards. Meanwhile, Sinomach Hainan will supply advanced agricultural machinery, irrigation technology, and infrastructure contracting services. Crucially, Sinomach will serve as the primary off-taker for hay exports to China, leveraging its extensive capital resources and logistics networks to support project financing and market access.

Strategic Implications

This partnership aligns with broader Chinese initiatives under the Hainan Free Trade Port framework to modernize agriculture and secure food supply chains. For Aumake, the deal represents a strategic diversification beyond its core e-commerce and brand acceleration business, moving into scalable agricultural supply chains with long-term export potential. The integration of Chinese technology and Australian agricultural expertise could set a new benchmark for cross-border agricultural collaboration.

Next Steps and Outlook

While the framework agreement is non-binding and subject to detailed due diligence and commercial negotiations, it lays a solid foundation for definitive contracts and financing arrangements. Both parties are poised to advance feasibility studies and formalize operational structures. Investors will be watching closely for updates on binding agreements and the project's execution timeline, which could significantly impact Aumake’s growth trajectory and the Australia-China agricultural trade landscape.