Tackling the impasse over sugar marketing was one item on the agenda when Federal Minister for Agriculture & Water Resources Barnaby Joyce toured QSL's bulk sugar terminal in Mackay with Canegrowers Mackay chairman Kevin Borg, Federal Member for Dawson George Christensen and Canegrowers Queensland chairman Paul Schembri.
Tackling the impasse over sugar marketing was one item on the agenda when Federal Minister for Agriculture & Water Resources Barnaby Joyce toured QSL's bulk sugar terminal in Mackay with Canegrowers Mackay chairman Kevin Borg, Federal Member for Dawson George Christensen and Canegrowers Queensland chairman Paul Schembri. Contributed

Sugar company to overhaul its structure to stamp out threat

QUEENSLAND Sugar Limited has agreed to overhaul its company structure in a bid to stamp out the threat of losing control of the state's sugar terminals.

As milling company Wilmar continued to holler complaints, Queensland Sugar Limited came to a resolution with Sugar Terminals Limited on Tuesday.

The agreement would see QSL continue in its role of operating the terminals on behalf of owners STL for at least the next five years.

STL was formed in 2000 and took on ownership of the six sugar terminals from Cairns to Bundaberg, which had been paid for by the sugar industry over generations.

The "world-class assets" are key to ensuring the Queensland's industry is competitive, as it is up against overseas producers propped up heavily by government subsidies.

As the terminals can store 2.5 million tonnes of sugar, the majority of the 3.5 million tonnes exported each year, the industry can wait until sugar prices are high before selling.

But after milling company Wilmar claimed two of the five seats of the STL board in October, the only two seats allocated to millers, fears had mounted the company would be successful in its push to remove QSL from its operational role.

Wilmar's motivation stemmed from the fact that by July 2017 QSL and Wilmar would directly compete in sugar marketing, QSL's other role.

But because it operated the terminals, QSL would gain access to information into the sugar coming in from all the mills, which would hand it a competitive edge. For that reason Wilmar believed there would be a conflict of interest and breach of confidentiality for QSL to continue terminal operations.

On the other hand, industry stakeholders feared that if QSL were removed from the position the terminal pricing structure, that was roughly equal for growers across the state, and 'cost-recovery basis' of operation would be in jeopardy.

So as part of the term-sheet agreement put forward on Tuesday, QSL also announced a new operating model that would see its marketing and operating arms split.

It claimed these "ring fencing" provisions would see each division managed and operated separately, ensuring QSL could not use information gathered through operating the terminals to give it a competitive boost in sugar marketing.

But Wilmar was far from satisfied.

Although it is under investigation from the ACCC about another issue, a spokesman said on Tuesday that the company "expects the competition regulator to be watching closely".

He also condemned STL for refusing to take on operation of the terminals.

But STL chairman Stuart Gregory said all stakeholders would benefit from the new agreement, which will be confirmed as soon as detailed legal binding documentation is finalised, executed and approved by the boards of STL and QSL.

It was also revealed on Tuesday that, subject to shareholder approval, two more independent directors would be appointed to the STL board, to sit alongside the independent chairman, two miller and two grower directors currently appointed.

Queensland Canegrowers chairman Paul Schembri welcomed the news, noting that QSL's new operating structure was crucial given the more competitive sugar marketing environment that would soon come into play.

"Now we've got certainty over the key infrastructure in our industry," he said.

"It (also) means that whichever marketing pathway our growers choose for their economic interest sugar, their miller or QSL, they can have confidence that their sugar will be treated fairly. This is a tremendous outcome for growers, millers, marketers and therefore the industry as a whole."



Apology handed down to Ipswich residents at the 11th hour

premium_icon Apology handed down to Ipswich residents at the 11th hour

"There has been a stench over council and I want to see that lifted"

2020 election too soon to call for veteran councillors

premium_icon 2020 election too soon to call for veteran councillors

Both reluctant to make a call on running again in 18 months

Homeless man the victim of 'brutal, cowardly' street bashing

premium_icon Homeless man the victim of 'brutal, cowardly' street bashing

Magistrate horrified by young attacker's assault

Local Partners