Sugar Terminals Limited’s decision to remove Queensland Sugar Limited and become owner/operator of the state’s bulk sugar terminals has generated a stir right across the industry. But it is an issue that has potential flow-on effects to the regional community and economy.
It is for the two entities to stop the blame game and come up with a resolution in the best interests of the industry and the regional communities they support. Right now, the Queensland sugar industry is renowned internationally for efficient, reliable and cost-effective bulk handling of our commodity and protecting this is a no-brainer.
Sugar is a staple in our regional economy, and our capacity to reliably deliver to our export customers - the outstanding performance at bulk sugar terminals like Mackay’s - is a crucial point of difference in the world market. We can grow all the sugar in the world, but if we can’t get it out reliably, then it is all for nothing. Our customers will shy away and look elsewhere.
The flow-on from that would reach out to businesses across the region, from retail and hospitality to transport and engineering and direct sugar industry services.
Having bulk storage capability means that when sugar prices are low, we can hold onto some of our product and wait for stronger prices. It brings a better return for growers and millers that share an economic interest in the product and in turn puts more money into our community, strengthening our economy.
Concern has been expressed across the supply chain that the move – planned for end of the current contract in 2026 – will remove an important balance that the industry implemented to avoid having the state’s bulk sugar terminals placed in the hands of a private enterprise whose main objective is to appease their shareholders, who demand a strong return. This problem is compounded as a growing number of those shareholders are no longer active in the industry- a requirement to be a shareholder. This means STL is operating outside of its constitution. Further, these inactive shareholders are preventing newer growers from having access to a shareholding in these industry assets. It is absolutely critical that control of the terminals stay equitably within industry hands.
On the miller-class side, Wilmar holds the majority of miller-class shares. Wilmar, of course holds several operational arms in Australia, chiefly milling and marketing. This gives Wilmar a strong board presence. Wilmar is a competitor with QSL in the marketing space.
In 2000, when the government stepped back from direct management of the BSTs, ending the Queensland Sugar Corporation, QSL was established as a NOT-FOR-PROFIT entity, to continue the other responsibilities of QSC: marketing all export sugar produced in Queensland and managing all bulk sugar terminals. De-regulation has allowed other marketers into the industry, but QSL remains strong in that space and an effective terminal operator. That not-for-profit status allows it to cost-effectively continue BST operations as a service to industry.
At CANEGROWERS Mackay, and at CANEGROWERS state Policy Council, we have met with both STL and QSL board and management. We have heard the point of view of both sides, and have spoken firmly for the interests of growers in this debate. We are still yet to see a firm business case for how in-sourcing will make the ports more cost-efficient, and would suggest the extensive outlay in purchasing terminal assets, and the increased tax liabilities moving from a not-for-profit to a for-profit operator are both large financial hurdles to straddle. It has been reassuring to hear that terminal staff would retain employment. However. We also see that a for-profit entity is likely - by the nature of the beast, to charge what the market can bear. As growers, we need the security of having access to ports at a reasonable rate.
Mackay is home to the oldest of the six bulk sugar terminals, operational from 1957. Two-thirds of that was paid for by the Mackay Harbour Board, and through special dues on cargo. In fact, the whole harbour construction cost borne by Mackay Harbour Board was to a large extent funded by Special Dues paid by the sugar industry. Prior to 1957, 5.5million tonnes of raw sugar had been shipped from Mackay in bagged form.
It’s an industry asset. For the sake of the industry, and for regional economies, it is imperative that QSL and STL resolve this dispute with minimal disruption to the industry.
Mackay Bulk Sugar Terminal - the exit point to export markets for the region’s sugar product - is a critical part of the regional economy. Photo credit: Kirili Lamb
The Mackay Harbour Story (HA Moore), and Sugar in Mackay (Mackay Printing and Publishing) tell the story of our sugar port’s development
Publishers Indemnity. Any individual or entity that places advertising, supplies copy material, or submits editorial content to Core Life Publishing agrees and undertakes to ensure that all such material:- Does not infringe upon any copyright, trademark, or other intellectual property rights;- Is free from any content that could be considered defamatory, libelous, or slanderous;- Does not infringe upon any rights related to privacy or breach of confidence;- Contains no obscene, indecent, or otherwise unlawful material;- Complies fully with the Trade Practices Act and all other applicable laws, regulations, or statutes.Furthermore, by submitting or placing such material, these individuals or entities agree to indemnify and hold harmless the publisher, Core Publishing and Events Pty Ltd, and/or its agents from and against any and all investigations, claims, demands, liabilities, damages, costs, or judgments arising out of or in connection with the material provided. All material is believed to be accurate at the time of printing and remains the copyright of Core Publishing and Events Pty Ltd.
© 2024 Mackay and Whitsunday Life Pty Ltd.
