Bomb­shell for grow­ers

• Mackay Sugar strug­gling with $212m debt • Idea #1 — grow­ers to pay $2 a tonne levy • Idea #2 — grow­ers buy half Moss­man mill

Port Douglas & Mossman Gazette - - FRONT PAGE - SHANE NI­CHOLS

MOSS­MAN cane­grow­ers are in shock and the sus­tain­abil­ity of the in­dus­try is in ques­tion af­ter Mackay Sugar told them it wants to im­pose a$2 a tonne levy to help im­prove its mills.

Mackay also flagged it wanted to ex­plore the is­sue of sell­ing half the mill to the grow­ers.

The com­pany, whose fi­nan­cial prob­lems are now be­ing tele­graphed very clearly, is con­sid­er­ing rec­om­men­da­tions in a re­port by con­sul­tants Kid­der Wil­liams, which is look­ing at ways to deal with Mackay’s $212 mil­lion debt and the need to im­prove and sus­tain ef­fi­ciency across its mills.

Mackay’s chair­man, An­drew Cap­pello, told ABC Ra­dio the com­pany wanted to have shed meet­ings with grow­ers in

all its re­gions about pos­si­ble changes un­der the rec­om­men­da­tions.

But ac­cord­ing to prom­i­nent lo­cal grower Don Mur­day, chair­man of the Aus­tralian Cane­farm­ers As­so­ci­a­tion, agree­ment on these things is go­ing to be dif­fi­cult.

But Mr Mur­day’s ini­tial fears af­ter the an­nounce­ment of these pos­si­ble moves were less­ened some­what yes­ter­day af­ter he had a brief­ing, as a bar­gain­ing agent, with Mackay’s chair­man Mr Cap­pello and CEO Ja­son Lowry.

He said it be­came clear Mackay Sugar Ltd needed to im­prove its equity po­si­tion so it could bor­row money to im­prove ef­fi­ciency across all its mills.

“The board haven’t de­cided on any­thing,” Mr Mur­day said. “These are just op­tions out of the con­sul­tant’s re­port.

“There’s still no de­tails – it was just a con­sul­ta­tion process to­day.

“Their fo­cus is on get­ting mill per­for­mance back up. We did well here in Moss­man last year but their Mackay mills are drag­ging.

“Moss­man has al­ready been im­proved be­cause it had to take on all that ex­tra cane to crush in the past two sea­sons. We’re lucky we have got an ac­cept­able level of mill per­for­mance, which they still don’t have in Mackay.

“It’s not all doom and gloom. This is just the first step – get­ting the feed­back and how to progress from here.”

Re­gard­ing the $2 a tonne levy pro­posal, Mr Mur­day said he would pre­fer it didn’t hap­pen, but rather they look at the per­for­mance of Qld Com­modi­ties Ser­vices, Mackay’s mar­ket­ing agents, be­cause “I pre­fer they look at the in­come side of the busi­ness more than the costs”.

Mr Mur­day said tak­ing an­other $2 off farm­ers meant that for a lot of them it was the loss of around half their profit mar­gin.

One ef­fect of los­ing $2 a tonne would likely be that farm­ers would be more stint­ing of their in­puts into their crop.

They might plant less, and they would cut back on spray­ing and other things.

He said that as far as sell­ing half the Moss­man mill back to the grow­ers, “it’s just not go­ing to hap­pen”.

“We’ve been there be­fore,” he said, “and we got burnt – the note­hold­ers and the third cane pay peo­ple didn’t get a cent out of sus­tain­ing the mill in the past, and I can­not see them do­ing it again.”

Sep­a­rately, last year Mackay Sugar set­tled a le­gal wran­gle with truck­ing com­pany Qube, which has been trans­port­ing cane to the Moss­man and Table­lands mills.

Qube had taken Mackay Sugar to court, al­leg­ing it had been un­der­paid to the tune of $790,000.

We’ve been there be­fore and we got burnt . . . I can­not see the grow­ers do­ing it again Cane­grower Don Mur­day

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