Bring agribusi­ness back from the brink

Townsville Bulletin - - Investor -

Queens­land Sugar Ltd chair­man ALAN WINNEY spells out the case for Aus­tralia re­tain­ing own­er­ship of re­main­ing sugar in­dus­try as­sets

Alan Winney in­creas­ingly sup­ply food for the north.

World pop­u­la­tion is ex­pected to num­ber 9.5 bil­lion in 2050 and Asia is adding 65 mil­lion peo­ple a year.

Asia is seek­ing food and en­ergy re­sources now and Aus­tralia is a pre­ferred lo­ca­tion.

This ap­pears to sug­gest Aus­tralia is in the box seat, but we could give away our tick­ets to the game with­out re­al­is­ing.

Our in­dus­try is not just about s u g a r ; i t i s a b o u t e t h a n o l , co­gen­er­a­tion and other prod­ucts.

Sugar and oil com­pa­nies are link­ing and multi-com­mod­ity agribusi­nesses, such as Su­cro­gen buyer Wil­mar and China’s Bright Foods, are mov­ing into the sugar space.

Thai­land’s Mitr Phol has 20 per cent of Mary­bor­ough Sugar; global player Bunge has bid for Tully.

Mills are con­sol­i­dat­ing and rev­enues to cane grow­ers could erode as global com­pa­nies seek cheap­est sup­ply.

Rep­re­sen­ta­tive bod­ies may evolve or dis­ap­pear; there will be re­duced pre­mium or brand­ing for Queens­land sugar and a real risk of re­duced in­vest­ment in re­search and de­vel­op­ment. The key ques­tions are: • What sort of in­dus­try do we want in 25 years?

• Who do we want to ben­e­fit from grow­ing global de­mand?

• Who do we want to con­trol and shape the sec­tor?

It is timely and ap­pro­pri­ate to work wit h g o v e r nment a nd oth­ers to es­tab­lish over­seas in­vest­ment ground rules be­fore we re­alise Aus­tralia’s agribusi­ness as­sets were sold while no one was watch­ing.

I be­lieve ground rules should in­clude com­mit­ments to:

• Trans­par­ent pric­ing to grow­ers, in­de­pen­dent ver­i­fi­ca­tion of the grower-miller mar­gin-split, some on­go­ing pric­ing cer­tainty.

• Con­tin­ued in­vest­ment in Aus­tralia-based re­search and de­vel­op­ment.

• Un­fet­tered ac­cess to es­sen­tial in­fra­struc­ture.

• In­vest in and grow Aus­tralia’s pro­duc­tion base and its val­ueadding sec­tor.

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