Midway’s move into grain promises big payday

WOODCHIP exporter Midway is closing in on deals that would see it export grain through its Geelong operation this year.

Managing director Tony Price told investors this week negotiations were on track with grain traders that were keen on gaining access to the planned facility in time for a predicted bumper grain season.

“We are well advanced in our negotiations in relation to the potential output of grain through our site in Geelong,” Mr Price said.

“We have a couple of major grain traders who have been actively pursuing us.”

In 2017, Lara’s Riordan Grain shook the industry by exporting grain through a mobile bulk loading system it used at Geelong’s Lascelles Wharf, injecting a competitor into Victoria’s bulk grain export market.

Midway will build two 10,000tonne grain storage silos at its Geelong port facility to accommodate its move that will diversify the Geelong operations that will see declining volumes of woodchip processed there over the next few years.

Mr Price said there were still some commercial issues to finalise but the negotiations with grain traders had been progressing well.

Midway announced a pre-tax profit of $12m, down from $37.1m, in the 12 months to June 30, before oneoff items and asset writedowns led to a statutory net loss after tax of $11.7m.

He said the company had been hit by a “triple whammy” starting early last year with a global oversupply of pulp, followed by the US-China trade war and then COVID-19.

Total sales revenue for the year was down 9.1 per cent to $257.8m.

Mr Price said Midway had weathered the storm, cutting costs were it could, including shutting down some operations, while also keep an eye on the future.

While it was early days, he said the company was starting to see positive signs of recovery, particularly in the economic recovery of China.

The Midway board did not declare a dividend and shares ended the week down slightly at 88 cents.

IN THE FINAL INSTALMENT IN OUR SPECIAL SERIES ON THE CHALLENGES FACING THE REGION’S BATTLING TOURISM INDUSTRY, DAVE CAIRNS LOOKS AT HOW THE REGION IS GOING TO BE PROMOTED ONCE THE TIME IS RIGHT