A positive step in the right direction for local cane growers
MACKAY Sugar Limited chairman Andrew Cappello believes the acquisition of the Mossman mill will complement his operations, contribute to the growth of its core business, and result in additional shareholder value.
“This is a positive step for Mackay Sugar, it presents further cane expansion opportunities and will increase our sugar production,” he said.
“Under Mackay Sugar ownership there will be confidence in the long-term future of the Mossman Central Mill.”
Under the sale price, the milling and related assets will be acquired by Mackay Sugar through the issue of $12 million in Mackay Sugar shares and refinancing $13 million of debt.
The shares, which amount to 3.3 per cent of the issued capital of Mackay Sugar, will be held by Mossman Central Mill.
The export sugar produced by Mossman Central Mill will continue to be marketed through Queensland Sugar Limited.
However, Mossman Central Mill will retain its food grade bagged sugar operation, which it markets under the brand Daintree Gold. Daintree Gold will be supplied raw sugar by Mackay Sugar under a commercial agreement.
Mr Cappello said Mackay Sugar would continue the cane supply agreement that is in place with the Mossman growers for the next three years, and would also offer the forward pricing option and cane development incentives, such as Secure the Future and Plant Loan Scheme, currently available to Mackay growers.
“Similarly, we will be taking on the employment obligations for those engaged in the cane transport and milling operations at Mossman,” he said.
“With the acquisition happening close to the start of the 2012 season, we will use the six-month crushing period to plan the integration of personnel and operating systems as appropriate.”