CANEGROWERS Media Release


30 May 2011: Keeping it local: Mackay ups the ante on race for Tully

Grower ownership of mills is hard to go past, says peak group CANEGROWERS today, on the back of news that Queensland Sugar Limited had sold its shares to Australian-based Mackay Sugar for $43, the same as the offer being put to Tully shareholders by Chinese company COFCO and New York agribusiness Bunge.

“When it comes to cane growers bargaining for fair contract conditions for supply of cane to mills, growers need every advantage they can at the bargaining table with these large corporate entities,” says Steve Greenwood, CEO of CANEGROWERS today. He says it was around this very principle on which CANEGROWERS was formed 85 years ago – to bring a united front for sugarcane growers to bring greater strength when bargaining with the corporate entities that were the milling sector.

But now the Australian milling sector is changing face again, says CANEGROWERS. “We are seeing intense interest in sugar industry assets by large foreign-owned agribusiness groups who are muscling to invest in our Australian milling assets,” says Greenwood.

“We are encouraging equally intense scrutinisation of every offer on the table – with a firm view of the longer term impacts each bid would bring.”

CANEGROWERS says the big five criteria which must be weighed up are:
1. Commitment to maintaining transparent sugar cane pricing arrangements that deliver appropriate benefits to growers.
2. Continued grower say in marketing arrangements.
3. Willingness to maintain open access to key infrastructure at the ports.
4. Specific planning for further investment and value adding in the sugar industry in Queensland.
5. Commitment to investing in future research and development to ensure the long‐term sustainability of the Australian sugar industry.

Investors are certainly seeing a future worth backing, with the international takeover of Sucrogen (previously known as CSR Sugar) by Singaporean agribusiness giant Wilmar, followed by the purchase of Mulgrave and Bundaberg Sugar’s far north Queensland mills by MSF (formerly Maryborough Sugar Factory). MSF has subsequently bought about the closure of the Babinda mill, and Thailand's biggest producer of sugar, Mitr Phol, has stepped up its stake in MSF.

“Now the race for Tully Sugar mill has begun in earnest, after a meeting of shareholders recently removed a roadblock to the sale. This has left New York-listed agribusiness giant, Bunge; Chinese government-owned, COFCO; and Australian grower-owned, Mackay Sugar Corporation; in a three way race,” says Greenwood.

CANEGROWERS says it is encouraging to see an Australian co-operatively run milling group being very competitive in the bid for Tully. “It will serve as a stark reminder during the bargaining process, of the benefits that grower-owned mills provide.”


Media comment: Steve Greenwood | CANEGROWERS CEO | 0488 721 156
More information: Suzi Moore | CANEGROWERS Communications | 0427 641 239 or 07 3864 6444