Bundy Canegrowers chairman Allan Dingle confirmed in a letter no money had been received from Oreco.
Bundy Canegrowers chairman Allan Dingle confirmed in a letter no money had been received from Oreco. Eliza Goetze

Fire insurance claim holds up money for local growers

BUNDABERG cane growers are still waiting to be paid for their cane trash from the 2016 season, with reports fibre company Oreco has been held up after a fire at the factory last year.

The Childers company, formerly known as Australian Prime Fibre, pays cane growers for the leaves and stems left behind in the harvest process, commonly known as trash.

They pay roughly $36-$37 a tonne and turn it into mulch, making use of a byproduct traditionally burnt or ploughed back into the ground.

But Bundy Canegrowers chairman Allan Dingle wrote to members in this month's newsletter.

"Despite receiving assurances that the final payment for 2016 Season trash would be received by 3 June 'at the latest', we have not received the money," he said.

"We understand that Oreco have not yet received full settlement of their insurance claim for stock lost in the fire at the Childers factory.

"We are waiting for full payment for the 2016 trash before proceeding with grower contracts for 2017-2019."

Bundaberg Canegrowers representatives met with Oreco this month to discuss the outstanding payments for 2016 and a new three-year contract for 2017-2019.

"Oreco have agreed to a price increase equal to CPI each year and to altering the due date for the first instalment payment from 31 December to 15 December," Mr Dingle said.

"Under the previous contract, the first instalment payment was due on 31 December and was always hampered by the public holidays over Christmas and New Year.

"The earlier due date should ensure that payments are received in time to be distributed to growers before Christmas."

Oreco chief executive John Buck said more than a million dollars' worth of stock had been lost in the fire and he was "incredibly sorry" for the delay.

"We're hoping to have the whole payments finalised by the end of this month," Mr Buck said.

"Canegrowers are our biggest partners in the area, both Isis and Bundaberg are very important to us.

"We hate the fact our cash flow has been disrupted.

"The silver lining is we're putting those processes in place and it will help us in the long run."

Oreco will change its storage processes, he said.

Until now, trash bales have been stored outside and all in the one place at Childers. Now stock will be divided and stored at different locations.

"We have recently commissioned another site down in NSW so we can store some stock there, and some at our baling facilities."

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