Sugar companies locked in battle
THE Bundaberg region's two sugar milling companies are locked in a battle for the loyalties of the area's cane growers.
Bundaberg Sugar is planning to hold a series of meetings with growers this week in what they say is a bid to secure the future of the industry in the city.
“We are talking with growers about how we can deliver the best options for them, and we are holding these meetings to make it easy for growers to discuss their best options in working with us by supplying their cane to our two Bundaberg mills,” Bundaberg Sugar general manager Ray Hatt said.
“We are happy to answer any of their questions.”
Mr Hatt said Bundaberg Sugar had introduced the Long Term Sugar Pricing Scheme several years ago.
“We have just expanded that scheme to give growers the option to lock in prices for up to five years, rather than three, and to secure those prices for up to 75% of their annual crop,” he said.
At stake is the future of Bundaberg Sugar's Bingera Mill.
To have a chance of Bingera remaining viable, the two Bundaberg Sugar mills need to crush 1.8 million tonnes of cane between them.
At present they are totalling about 1.6 million tonnes.
Isis Central Sugar Mill general manager John Gorringe said the company was in talks with growers now to lock in prices for up to six years, with incentives if they sign up by the end of this month.
He said he did not believe Bundaberg Sugar's enhanced deal for growers was a threat to Isis.
Mr Gorringe said the viability of the Isis mill, which received cane from growers as far away as Wallaville and Gin Gin, was still secure.
“There is no question about our mill being viable,” he said.
“Last year we made several million dollars net profit.”
The cane growing Loeskow family has backed Bundaberg Sugar, principally for the sake of keeping both Bundaberg mills open.
Jason Loeskow said it made sense to use Bundaberg Sugar's extensive cane train network, rather than burn fuel trucking the cane 40km to the Isis Central Sugar Mill.
“If we can lock in 1.8 to two million tonnes a year for Bundaberg Sugar, that will keep the mills viable,” he said.
Canegrowers chairman Allan Dingle said they had been working closely with Bundaberg Sugar over the past couple of years on incentives for growers, including a bonus system to help them switch back to Bundaberg.
They also wanted to encourage growers to increase production, and get some new people into the industry.
“We're looking at the future of the industry as a whole,” he said.
“If the Bingera sugar mill closed it's very unlikely it would reopen.”