MILLER CHAIR STEPS DOWN
Change at top MSL’s ‘only chance’
EXCLUSIVE: Mackay Sugar will have to survive its most difficult time with a new leader after long-serving chairman
Andrew Cappello stood down from the top job.
The shock resignation comes soon after what some described as ‘the worst
AGM the company had ever had’.
Mr Cappello had been chairman for seven years, during the most challenging period in the company’s history.
Beset with ballooning debt, poor milling performance and shrinking crop sizes, the miller is nowhere near out of the woods, prompting Mr Cappello to pass the reins to Mark Day.
Some in the industry believe this could be the move that keeps the company in the hands of its growers.
Mackay Sugar is searching for an angel investor to save it from being taken by the banks because of its $180 million debt and poor performances over past years.
The company was trying to refinance by selling its profitable Racecourse co-generation plant, Mossman Mill and imposing a $2 a tonne levy on growers.
However, that plan has been put on hold after a legal challenge to the levy by some growers and lower than expected bids for the co-generation plant.
Mr Cappello and Mr Day both declined to be interviewed by The Daily Mercury yesterday.
A statement from Mackay Sugar said the decision came after the October annual general meeting.
Grower and former director Rex Stroppiana, who led the legal challenge against Mackay Sugar’s $2 levy and won, said it was the worst AGM the company had had, growers upset by a proposal to shut down one of the company’s four mills to cut costs.
“The shareholders lost all respect for the board and management at that meeting,” Mr Stroppiana said. “Hopefully, this is a new beginning of some significant change.”
Former board member and mill manager Barry Sheedy has thrown his weight behind Mr Day, saying he was the company’s best chance of survival.
“Mr Day is (Mackay Sugar’s) only chance of getting them to pull through and he will need a lot of support,” he said.
“He is sufficiently experienced to recognise the problem and take the steps to fix them but he will need the support of the banks to restore that position because you can’t do it without a lot of money.”
Mr Sheedy was Farleigh Mill manager for 13 years and a director of Mackay Sugar from 1994-2005.
When Mackay Sugar formed, the Farleigh Mill brought $15 million into the new company.
“This is terrible I don’t want to see Mackay Sugar being sold to someone else,” he said.
“It will at least be a 10-year fix for (Mackay Sugar) to trade out of their problems and critically they need to restore the confidence of the growers in the milling company.”
Canegrowers Queensland chairman and Mackay Sugar grower Paul Schembri said Mr Cappello had been under a lot of pressure.
He said Canegrowers had never questioned Mr Cappello’s commitment towards the company, his job and the shareholders.
But he too was looking forward optimistically, believing this change could bring the growers together to keep the business grower-owned.
“Now we need to support our new chairman and move the business forward,” he said. “Let’s make no bones about it, the business is in a difficult situation but we need to come together because the destiny is in our hands.”
Mr Day joined the board as a non-grower director in May after spending three and a half years in Brazil as operations director for eight sugar cane factories owned by Bunge Brazil.
Prior to that he had an extensive career with CSR/Wilmar in sugar, managing CSR’s cane sugar businesses as executive general manager for six years and two years in Indonesia with Wilmar on expansion opportunities in that region.
Previously he worked for CSR as a shift supervisor in the Mackay region in 1980.
Mr Cappello will remain on the Mackay Sugar board.
There had been reports Bunge, the Brazilian company which Mr Day worked for had been inspecting Mackay Sugar to possibly buy it.
Mr Schembri confirmed Bunge staff had been in Mackay last week but did not speak to him about Mackay Sugar.
A Bunge spokesperson said the company had no interest in the sugar industry.
STEPPING ASIDE: Former Mackay Sugar chairman Andrew Cappello stood down from the top job yesterday.