annual review 2013/14 - australian sugar milling...

Annual Review 2013/14

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TABLELAND

MOSSMAN

TULLY

MossmanDaintree

MULGRAVE

Mourilyan

LucindaIngham

MACKNADE

VICTORIA

Cooktown

INVICTA

KALAMIA

INKERMAN

PIONEER

Townsville

CairnsMareeba

Proserpine

PROSERPINE

MackayFARLEIGH

PLANE CREEK

BINGERA

ISIS CENTRAL

MARYBOROUGH

HARWOOD MILL & REFINERY

BROADWATER

ROCKY POINT

MARIAN

RACECOURSEMILL & REFINERY

Rockhampton

Bundaberg

Maryborough

Grafton

BRISBANE

Gympie

Nambour

Lismore

Coffs HarbourNEW SOUTH WALES

QUEENSLAND

Sugarcane areas

Sugar mills

Sugar refineries

Bulk sugar terminal ports

Innisfail

CONDONG

MILLAQUIN MILL & REFINERY

SOUTH JOHNSTONE

The Australian Sugar Milling Council (ASMC) is a voluntary organisation, established in 1987 to represent Australian raw sugar mill owners.

Mission statementASMC exists to drive a profitable and sustainable sugar industry through dynamic leadership, strong and effective advocacy and services that build value for our members, and the broader industry.

Our shared vision is for a growth industry that is:

• successfully competing in the world market through profitable businesses

• successfully diversified into sugar cane products using world class research and development

• recognised as global leaders in environmental sustainability

• built upon dynamic and cooperative industry leadership.

Core values that underpin the philosophies and operating style of the ASMC team are:

• the courage to drive and respond to change

• integrity in what we say and do

• energy, enthusiasm and growth

• accountability

• relationships built on respect.

ASMC members

Bundaberg Sugar Ltd

Chief Executive Officer and ASMC Director: Ray Hatt

Mills: Millaquin, Bingera

Isis Central Sugar Mill Company Limited

Chairman: Peter Russo

Chief Executive Officer and ASMC Director: John Gorringe

Mackay Sugar Limited

Chairman: Andrew Cappello

Chief Executive Officer: Quinton Hildebrand

ASMC Directors: Quinton Hildebrand, Andrew Cappello, Bill Phillips-Turner

Mills: Farleigh, Marian, Racecourse and Mossman

MSF Sugar LimitedChairman: Isara Vongkusolkit

Chief Executive Officer and ASMC Director: Mike Barry

Mills: Mulgrave, South Johnstone, Tableland, Maryborough

Tully Sugar Limited Chairman and ASMC Director: Dick Camilleri

Chief Executive Officer: Alick Osborne

Wilmar Sugar Australia LimitedExecutive General Manager North Queensland: John Pratt

General Manager Operations: Michael McLeod

ASMC Directors: John Pratt, Russell Abotomey

Mills: Macknade, Victoria, Invicta, Pioneer, Kalamia, Inkerman, Proserpine, Plane Creek

Australian Sugar Milling Council

Yarraville Melbourne

VIC

NSW

QLD

NT

SA

WA

TAS

AreaEnlarged

Brisbane

Perth

SydneyAdelaide

Darwin

Canberra

Fuller profiles of our members can be found on the inside back cover of this Annual Review.

Front cover: 2014 Competition winner Old farm – new ways. Photography: Richard Curzon

Visit our website: asmc.com.au

http://www.asmc.com.au


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Chairman’s Report 2

Chief Executive Officer’s Report 4

Our Milling Council Team 5

Sugar Industry’s 30-year Strategies 6

2013 Season overview and statistics 8

People & Safety 10

Raw Sugar Milling 14

Transport 16

Queensland’s 30-year Strategies 18

Water Strategy 18

Electricity Pricing 18

Industry Diversification 20

Renewable Electricity 20

Biofuels 22

Trade 24

2013/14 Photography Competition winners 26

ASMC members’ profiles 27

Contents

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2013 Season overview and statisticsSugar Industry’s 30-year Strategies

TradeIndustry Diversification

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Chairman’s Report

Trade matters improving

On the Trade front, conditions for a free trade agreement between Australia and Korea were finalised and promising discussions have continued towards the achievement of a Trans-Pacific Partnership (TPP). The Australian sugar industry strongly supports our government negotiators in pursuing an outcome that will establish rules enabling sugar to move freely between TPP member countries. This will be challenging to achieve but for the first time Australia has several strong allies to combat the USA’s views around ‘sensitive’ products, such as sugar, being excluded from trade arrangements.

Cane railway agreements now provide certainty

On a more operational level, at the Milling Council, the achievement of common long-term agreements between the Queensland State Government and milling companies for Ancillary Works and Encroachment arrangements for railway crossings of state-controlled roads provides ongoing certainty for mills operating cane railways.

Similarly, 20-year agreements covering maintenance and safety arrangements between mills and Queensland Rail — where cane railways intersect with government railways — were finalised in late 2013. These agreements exemplify the potential for government and industry partnerships and reflect the significant public good delivered via sugar cane being transported from farms to mills via our considerable network of privately-owned narrow gauge rail, rather than via public roads.

Production results In the far northern areas of the state, 2013 saw the resulting cane crops and sugar production as the best for some years.

Elsewhere within the state, however, crops ranged from average to disappointing with the impact of floods earlier in the year evident in the southern region and the Herbert/Burdekin and central regions impacted by less than ideal growing conditions during the summer months. In some districts this was compounded to an extent by Yellow Canopy Syndrome (as referred to in the 2012/13 Annual Review). I have further commented on this syndrome in this report.

Ultimately, the Australian crop was again slightly above 30 million tonnes with the attendant sugar production just short of 4.2 million tonnes.

From a 2013 results perspective, we were essentially presented with a mixed bag. In the early part of the growing season, droughty conditions predominated, but in areas north from Sarina, rainfall during January and February provided an improvement in prospects.

Unfortunately, the same could not be said for the southern region from Bundaberg to Maryborough where the drought, during late 2013 and into 2014, was extreme. In Maryborough rainfall between July 2013 and February 2014 was the lowest measured since 18701.

Generally, across the southern region, there was only limited irrigation water available and this was predominantly used to

2013 saw the Australian sugar industry continue its slow growth trend in terms of crop tonnages and sugar production.

Land under sugar cane increased significantly on 2012 (+7,500 hectares) and — but for the damage resulting from the devastating floods in the Bundaberg region — this could have increased a further 1,500 hectares.

I expect this land returning to sugar cane production trend to continue in 2014/15, but the hurdles of rising electricity and water prices may steady it somewhat.

The year’s considerable achievements I would like to reflect a little on the industry’s achievements during the year.

Sugar Research Australia launch — a highlight

With the legislative changes required to form Sugar Research Australia (SRA) occurring during the dying moments of the former Federal Government’s tenure, the anticipation kept anxiety levels high right to the very end. The achievement of SRA’s formation and launch reflects an outstanding body of work which Dr Sandra Welsman led and coordinated, ably supported by ASMC’s Chief Executive Officer Dominic Nolan from late 2011 until June 2013.

SRA’s formation confers us the opportunity to increase investment in sugar industry research and achieve a higher level of Federal Government matched funding than ever before. SRA is now a $30 million research organisation with an annual goal of investing and managing some $18–20 million in research activities for our industry.

Industry nutrition strategy

Agreement to develop and fund an industry nutrition strategy will help us maintain an industry that is at once respected and valued for its key contribution to regional economies, and recognised as such by all relevant stakeholders from direct industry participants to consumers and governments.

1 Written records first began in 1870.2 Bureau of Resources and Energy Economics (BREE). 2014. An assessment of

key costs and benefits associated with the Ethanol Production Grants program. February 2014. Department of Industry.

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and 2001). Significant research is being devoted already to this problem and, while not questioning the need for this, we need to ensure progress towards a solution is being maintained. To date, SRA has invested more than $1 million tracking the syndrome and establishing trials to better understand its underlying contributing factors.

Expenditure of more than $1 million per year has now been committed for the next three years, including new elements of micro-biological examination of affected plants in search of a solution.

People & Safety — an increased focus

Safety in the sugar industry continues to challenge. While milling companies have dedicated programs targeting continual improvement in their practices, workplace safety must always be a priority for our businesses and the industry collectively.

ASMC must continue to leverage the available opportunities by sharing milling company learnings and experiences, as well as apply industry-external expertise and knowledge.

Raw sugar export marketing arrangements

The debates on future marketing arrangements in the industry involve the milling companies’ range of views. Nevertheless, the mills reached agreement in late 2013 on a package of measures which appeared to deliver the outcome for which CANEGROWERS and Australian Cane Farmers Association had been arguing on their members’ behalf. Unfortunately, the growers rejected that package.

We continue to approach marketing challenges with a positive mindset but we must be careful not to let these dominate the agenda to the detriment of other important matters. The key challenge for our sugar industry will be to maintain our alignment (between mills and between the Milling Council and the grower organisations) on matters critical to our common benefit.

A generally positive year

I believe the past year has been generally one of positive achievements for the Milling Council. The availability of specialist milling staff to assist in the range of programs and activities the Milling Council coordinates on a daily basis is fundamental to our achievements.

I would like to record our gratitude to Dominic Nolan, and his dedicated team at the Milling Council, and to each of our members and the individuals who have been involved on our committees and specialist working groups during the past twelve months. We would not be in this position without all their commendable efforts.

Quinton HildebrandQuinton Hildebrand, Chairman

nurture the plant and first ratoon crops. In many instances, stools were dying from lack of water and the most optimistic forecasts had the southern region crop struggling to reach 2.75 million tonnes, compared with 3.5 million tonnes in 2013 and 4.2 million tonnes in 2012.

The present challenges On the horizon we face several formidable challenges and here at ASMC, colloquially, the feeling is we ‘have our work cut out for us’.

Renewable energy policy under threat

While there were some positives in terms of last year’s change of government for our industry, the Coalition’s current approach to renewable energy policy gives us cause for great concern.

At best, most political commentators are predicting a significant scaling back of the Mandatory Renewable Energy Target; the worst predictions imply a dropping of the target altogether along with the significant associated incentives for investment.

This is an area where the Milling Council will need to run a very strong program in the coming year to demonstrate the value and strengths of the renewable energy target, and dispel the misinformation and myths currently being promulgated.

Similarly, the February 2014 report2 by the Bureau of Resources and Energy Economics — claiming that the excise arrangements for ethanol and energy have limited national benefit — is an attack on the industry that needs to be defended strongly. Not only is ethanol production a current downstream revenue source for a member of this Council but, with anticipated technological change, it is an area of future potential for the industry.

The policy context

Trade, research and development, and government policy and advocacy will continue to need a fraternal, united action across the mills, and work alongside growers. Irrigation and electricity costs, infrastructure investment priorities, the Renewable Energy Target, as well as broader environmental and resource management issues, will all directly impact the immediate and longer term competitive environment for Australian sugar businesses.

The environmental concerns associated with our industry’s coastal location will continue to demand careful, well-resourced attention during the next twelve months. The threat to the industry’s overall productivity through changed cropping husbandry targeting improved water quality run-off outcomes is real. We will need to be proactive as the amounts of fertiliser we use to grow crops, and herbicides used to control weeds, are under constant challenge.

Yellow Canopy Syndrome

Yellow Canopy Syndrome remains a shadow overhanging the industry. There is a view that this yellow leaf condition had a part to play in the Burdekin area’s disappointing yields in the last year (the lowest since the orange rust devastated crops of 2000

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Chief Executive Officer’s Report

areas of operations is understood by the most progressive of industries. This remains a key focus for ASMC, and is already delivering significant project and policy results.

The People & Safety Committee meets face to face on a quarterly basis and the commitment each Milling Council director makes to attend a meeting is testament to the importance and priority of this committee’s role. There is still much more work to be invested to further develop this function, and we are looking forward to yielding powerful results in the future.

Sugar Research Australia (SRA)

In last year’s Annual Review I dealt in some detail with the body of work undertaken by the Milling Council in association with the reform of sugar industry research. Suffice to say SRA, the new structure, was delivered by 1 July 2013, albeit in the nick of time!

The Australian Sugar Industry Alliance (ASA) and SRA boards officially met jointly for the first time in early 2014, and less formally on previous occasions. These joint meetings are all important in forging a close working relationship between the research organisation and industry leadership groups.

Trade and market access

The importance of achieving a TPP Trade agreement that is inclusive of acceptable arrangements for raw sugar ranks as a high priority for the Australian sugar industry. The industry has had representation at each of the negotiating sessions and Ministerial meetings, generally through Warren Males, Secretary of the ASA Trade Committee, and I attended the Salt Lake City round in November 2013.

Increased funding has been dedicated to the trade and market access requirements, and a commitment made to have at least one sugar industry representative at all negotiations. However, as with all trade policy matters, progress is slow. The targeted timetable of conclusion in 2013 was moved back, and may not even conclude during 2014. With so much at stake, the industry maintains our strong level of commitment.

Australia again hosted sugar industry delegates from Thailand at the Thai-Australian dialogue on the Gold Coast in July 2013. The close relationships forged between our two countries during these dialogues are reflected in Thailand’s support for Australia in global trade issues involving sugar.

Broader trade and market access efforts continue apace, through our involvement and support of the Global Sugar Alliance’s annual and task-force meetings, and ongoing interaction with the International Sugar Organisation.

Australian sugar industry and government policy — a perfect storm brewing?

On a final note, recent discussions and political commentary highlight the precarious policy position the sugar milling sector

I believe it is critical for an organisation such as the ASMC to continually review its purpose and the strategies employed to deliver that purpose and continue to provide value to our members and the industry.

What have we achieved for our members?A key question that every member of the Milling Council should be able to positively answer is ‘What has the Milling Council done for us lately?’

In 2013 we undertook a review surveying the views of directors and several external stakeholders. This canvassing of members’ and stakeholders’ views confirmed that the ASMC’s singular purpose remains to drive a profitable and sustainable sugar industry through dynamic leadership, strong and effective advocacy, and provide services that build value for our members and the broader community.

We continue to operate under the broader vision around sugar industry growth, to compete on the global stage, explore successful diversification, and apply world-class research and development to ensure leadership in sustainability across environmental, social and economic drivers, and importantly through a collaborative, dynamic industry.

The ASMC has five core goals:

1. Industry-responsive government policies and programs

2. Streamline regulatory compliance and reporting

3. Continual improvement in industry performance

4. Enhanced trade access and market competitiveness, and

5. A sugar industry valued for its environmental, social and economic impacts.

I will briefly comment on several key developments of 2013, and the emerging challenges and opportunities for 2014/15.

People & Safety2013 saw a significant and exciting change at the Milling Council with the merging of Safety with People (that is, Human Resources, Industrial Relations, and Training) into the combined function ‘People & Safety’. The synergies and crossover of these functions and, more importantly, how they align with other

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faces in the immediate term, and the broader industry in the longer term.

Electricity prices are the most obvious and impacting cost of production for the growing sector, and the constant drive for better-performing varieties and productivity.

The Australian sugar industry seems to be under attack from public health activists on the nutrition side; from energy companies and major manufacturing on the renewable energy side; and from oil companies and neo-liberalism on the biofuels side calling for the removal of the ethanol producers’ grant program.

On their own, these policies and programs are significant from a production and revenue perspective. In combination, however, they represent the pathway for industry growth and development that all our international competitors are pursuing with the support of favourable policies by their respective governments. Removal of some or all of these policies in Australia threatens to derail the opportunities for sustainable growth all our milling companies are pursuing. With the diversified income of our competitors in Brazil or Thailand being as much as 20–30 per cent or more of milling operations, our own Australian sugar industry must have access to similar opportunities to remain internationally competitive. And to achieve this we must have a supportive government and policy framework.

My thanks to the ASMC team and our membersThe Australian Sugar Milling Council operates with a small team of seven. The addition of a Policy and Government Affairs role and a Safety and Workplace Relations role during the past twelve months has brought the ASMC team back to full strength, bringing an ideal complement to the existing capacity and strength of the team.

I want to particularly mention the support and resources our members provide. The continual support the Chairman, each of the directors, and the key staff and contacts at mills offer through their contributions to committees, working groups and day-to-day contact, is critical to our success. Our small team at times coordinates and leverages efforts from a much larger base, thanks to the contribution of the time and energy these milling company personnel invest in matters that impact sugar milling in particular, and the industry more generally.

2014/15 holds the prospect of many ongoing and, undoubtedly, new challenges. I have already outlined some of these in this Annual Review; but there may be others that we know little or nothing about today that could potentially consume large amounts of our energy and attention.

For now, though, all we can do is keep a ruthless focus on our five core goals, and will ourselves to succeed. We therefore look forward to the coming year with engagement, enthusiasm and commitment.

Dominic NolanDominic Nolan, Chief Executive Officer

Our Milling Council TeamDominic Nolan, Chief Executive Officer

Dominic Nolan has been the Chief Executive Officer since February 2009. In addition to overall responsibility for the Milling Council’s operations, Dominic’s main efforts centre on political advocacy and engagement, and collaborative efforts with other key industry stakeholders.

Jim Crane, Senior Executive Officer, Industry and Communications

Jim’s portfolio reflects the broad range of issues which confront the sugar industry. Apart from his primary tactical role responding to the myriad of day-to-day matters, Jim represents the milling industry on government working groups related to environmental and transport matters and carries a broad resource management role.

Sharon Denny, Senior Executive Officer, Government and Business Development

Sharon’s role is to develop a policy pathway for future industry development and negotiate the challenges and opportunities emerging from government (policies), technology developments and industry innovation.

Jacqui Willcocks, Executive Officer, Policy and Government Relations

Jacqui joined the Milling Council in 2013 and uses her public sector experience to provide effective support for a range of policy, advocacy and membership services for ASMC and its members.

Frank Marchetti, Executive Officer, Safety and Workplace Relations

Frank has recently joined the Milling Council and is looking forward to influencing legislation and being an information conduit for members on some of the emerging issues in the People & Safety functions, and moving with the industry to the next level of safety performance and best practice.

Emma Roberts, Office Manager

The Milling Council’s main point of contact since she joined in 2008, Emma manages the financial and administrative operations, as well as continuing to work closely with staff and facilitate member communication.

Stephanie Kavanagh, Administration & Project Officer

Stephanie is a first point of contact with the Milling Council. Working part-time, and in collaboration with Emma, Stephanie provides for the efficient functioning of the Milling Council office, assisting with member communication and administering special projects.

Our staff profiles are featured on the ASMC website.


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Sugar Industry’s 30-year Strategies These townships have benefited from extensive industry investment in long-term infrastructure, such as rail, port, storage and water. However, this investment is quickly forgotten or becomes invisible with successive changes in government over the period. Not so for the industry, which is well aware of how important its investment in infrastructure has been to both the regional and economic development of the respective sugar regions. The industry is also well aware of the impact of poor planning policy on industry viability.

As state and federal governments move from public beneficial investment to cost-reflective pricing of assets in these regions, and increasingly rely on public private partnerships to finance such investment, it is critical the industry ensures its future growth is supported — rather than hindered — by government policy, and that governments have a good understanding of the ‘invisible’ investment and associated opportunity created by the sugar industry to date.

The ASMC’s work in a range of policy areas, further covered in the remainder of this Annual Review, highlights specific policy areas of action over the 2013 and 2014 seasons that impact on the industry’s current and future viability, and will also inform the broader industry strategy.

In 2013, the Mackay Isaac Whitsundays region commenced the development of a 30-year industry strategy for the region. Supported by the ASA, and intended to position the local industry to exert greater influence on government decision-making, this strategy is also serving as a template for each sugar region in Australia.

Building from the bottom up, this template approach will serve to identify the common needs, aspirations and issues across the sugar industry, region by region, while highlighting the sometimes unique, but more frequently complementary opportunities across the industry, to form a 30-year industry plan.

Local, state and federal governments are increasingly rolling out a range of long-term, interdependent strategies, including:

• energy

• water

• transport

• infrastructure

• agriculture; and

• regional development and innovation.

It is critical that the industry forms a clear and unified view on its future direction. The industry has evolved over 150 years, forming the basis of many townships that now proliferate the Queensland and northern New South Wales coasts.

Hill Inlet, Whitsundays. Photography: Tourism and Events Queensland

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Burdekin Falls Dam – Construction of the Burdekin Falls Dam was completed in the late 80’s. It is the largest dam in Australia and stores 1,860,000 megalitres at full capacity. Sugar cane was harvested from more than 71,000 hectares in the Burdekin area during the 2013 season. Approximately 70 per cent of the Burdekin sugar cane crop is irrigated with water made available via the dam. Photography: Burdekin Shire Council

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New ‘babies’ — plant research and agronomy play a significant part in productivity. The sugar industry is always searching for better-yielding crops that are resistant to pests and diseases. Photography: Sue Blackburn

State average CCS of 14.17, up 0.3 of a unit on 10-year averageHigher sugar levels, up more than half a unit of commercial cane sugar (CCS) on the 10-year average, offset the impacts of this lower tonnage per hectarage for growers in the central and southern regions. The far north was right on its 10-year average CCS of 12.83, with the Herbert/Burdekin slightly below its average at 14.33.

This resulted in a state average CCS of 14.17, up 0.3 of a unit on the 10-year average.

The total area harvested in Queensland was up by approximately 7,500 hectares on the 2012 area. As the Chairman already outlined earlier in this Annual Review, this total could have been as much as 9,000 hectares, had the southern region floods not destroyed a significant area of sugar cane that had been intended for harvest during the 2013 crush.

Steady, if slow, growthIn 2013 the Queensland industry continued on a steady, but slower than hoped for, growth trend in terms of crop tonnages and sugar production.

After the devastatingly poor crop of 25.8 million tonnes in 2010 when wet weather intervened, causing close to 6 million tonnes left unharvested, the 2013 crop for Queensland again produced over 29 million tonnes, improving slightly on the 2012 result.

Chiefly responsible for this was the far northern sugar cane-growing regions where the area harvested for crushing was up by more than 3,500 hectares, and the yield was just short of 90 tonnes per hectare, more than 10 tonnes per hectare greater than the 10-year average.

Other regions suffered in terms of yield with the Herbert/Burdekin recording its lowest yield (90 tonnes per hectare) since the orange rust devastated crops in 2000 and 2001. The central region managed just over 73 tonnes per hectare.

While this was in line with the 10-year average, it was well down on expectations given the seasonal conditions experienced in late 2012 and the early parts of 2013.

Yields in the southern growing regions had been expected to be lower than the close-to-record results recorded during 2012, but the major flooding experienced during early 2013 had its additional downward impact with average yield for the southern areas falling to 70.41 tonnes per hectare, down some 14 tonnes per hectare on 2012.

The climate around Innisfail in north Queensland provides near-perfect growing conditions for sugar cane. Photography: Richard Curzon

2013 Season overview and statistics

Perfect Queensland cane country. Photography: Gail Sedorkin

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Industry statistics

Table 1: Area Harvested for Milling (Hectares) 2013 2012 2011 2010 2009Northern 73,521 70,745 68,678 68,574 70,635

Herbert-Burdekin 125,419 121,637 132,033 89,398 119,816

Mackay-Proserpine 107,461 106,171 105,796 89,669 108,854

Southern 49,805 50,041 46,139 44,286 44,797

QUEENSLAND 356,206 348,594 352,646 291,927 344,102 NEW SOUTH WALES 14,860 11,450 13,240 14,162 15,561 Table 2: Cane Crushed (Tonnes) 2013 2012 2011 2010 2009Northern 6,558,888 5,314,283 3,626,646 5,970,031 5,406,675

Herbert-Burdekin 11,291,076 11,104,867 12,471,413 9,752,738 11,154,318

Mackay-Proserpine 7,862,208 8,446,425 6,697,741 6,533,232 8,124,764

Southern 3,506,769 4,220,110 3,533,503 3,520,347 3,475,400

QUEENSLAND 29,218,942 29,085,685 26,329,304 25,776,348 28,161,157 NEW SOUTH WALES 1,301,910 915,027 1,613,468 1,666,171 1,653,768 Table 3: Sugar Produced (Tonnes IPS) 2013 2012 2011 2010 2009

Northern 853,281 693,840 453,211 599,628 849,836

Herbert-Burdekin 1,652,437 1,574,457 1,671,450 1,320,937 1,713,781

Mackay-Proserpine 1,179,221 1,244,662 894,014 874,817 1,238,625

Southern 521,406 621,704 483,992 478,870 505,500

QUEENSLAND 4,206,345 4,134,664 3,502,667 3,274,252 4,307,742 NEW SOUTH WALES 157,392 113,040 179,881 176,563 186,583 Table 4: Tonnes Cane Per Hectare Harvested 2013 2012 2011 2010 2009Northern 89.21 75.12 52.81 87.06 76.54

Herbert-Burdekin 90.03 91.30 94.46 109.09 93.10

Mackay-Proserpine 73.16 79.55 63.31 72.86 74.64

Southern 70.41 84.33 76.58 79.49 77.58

QUEENSLAND 82.03 83.44 74.66 88.30 81.84NEW SOUTH WALES 87.61 79.92 121.86 117.65 106.28Table 5: Tonnes Cane Per Tonne IPS Sugar 2013 2012 2011 2010 2009Northern 7.69 7.66 8.00 9.96 6.36



Southern 6.73 6.79 7.30 7.35 6.88

QUEENSLAND 6.95 7.03 7.52 7.87 7.07NEW SOUTH WALES 8.27 8.09 8.96 9.44 8.86Table 6: Tonnes IPS Sugar Per Hectare Harvested 2013 2012 2011 2010 2009Northern 11.61 9.81 6.60 8.74 12.03



Southern 10.47 12.42 10.49 10.81 11.28

QUEENSLAND 11.81 11.86 9.93 11.22 12.52NEW SOUTH WALES 10.59 9.87 13.58 12.47 11.99Table 7: CCS/Sugar Content 2013 2012 2011 2010 2009Northern 12.88 12.93 12.89 11.37 13.94



Southern 14.67 14.58 13.47 13.43 14.40

QUEENSLAND 14.18 14.05 13.39 12.87 14.72NEW SOUTH WALES 11.92 12.02 12.18 12.10 12.94

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We need to think differently

The changes to Workers Compensation recognise this, which is the reason premiums have reduced. Claims costs and damages are a significant cost to businesses everywhere and yet, the cost to business is not even close to the cost to that which an individual who has been seriously injured at work, and their family, will experience. For someone who returned home injured or worse, did not return at all, the cost is not easily calculated in terms of dollars and cents or statistics and numbers.

Our challenge is to think differently about safety and what it means.

We need to understand the statistics and the impacts, but we must never lose sight that every ‘statistic’ is someone’s co-worker, mother, father, sister, brother, son or daughter.

The reality is fatalities occurOver the past year we had some serious incidents in the sugar family, one of which included a fatality involving a contractor.

We work in an environment that has significant risks and exposures, moving plant and equipment at almost every point in the sugar production process. The final barrier of protection is the inclinations and motivations of the people who work within the industry, and not just those at the front line, but those at every level.

Safety during dismantling and maintenance activity is paramount in this industry. Photography: Milena Minchio

A reflection on 2013

In a legislative sense, the People & Safety arena has undergone many changes over the past few years with attempts at a set of nationally harmonised Workplace Health & Safety laws leading the way.

In early 2014 these harmonisation arrangements were once again changed in Queensland. Change was also afoot via the National Fair Work Commission and the subsequent amendments to the Sugar Industry Award.

Then, as recently as May 2014, changes and reviews were still being conducted and rolled out in the Award, and the ink has only just dried on the changes to Workers Compensation arrangements in Queensland which came into effect from 1 July 2014.

What does this mean for the future of People & Safety in the sugar industry?

It tells the industry that change from the outside is ever-constant, partly because there is streamlining across government departments, and partly because there is a strong push to reduce red tape. This change to our operating environment, however, provides an opportunity to continue to develop the industry’s systems and processes and increase our people’s knowledge.

When we know better, we do better.

Work in the sugar industry will continue to evolve in line with the wider community. There will be an increase in people working for longer, and retiring older than they have before. This then brings to the forefront the need to ensure the industry has in place the best possible People & Safety-related systems and processes — not because the legislation prescribes it, but rather because the industry needs to ensure its sustainable and safe future and that of its people.

People & Safety

Harvesting near Babinda — when operating heavy machinery such as this, safety always comes first. Photography: Bernard Milford

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Claims statistics (Queensland) 2014/15 and 2013/143

3 Source: WorkCover Queensland 31 October 2014. Information contained in these graphics is not exhaustive and only includes claims numbers for members who are covered under WorkCover Queensland for compensation purposes. This does not include self-insured members or those covered in other states.

Sugar ManufacturingNew claims – stat (14/15)

7

4

7

8

3

411

21

43

19

18

15

Headand face

Neck

Trunk

Wrist/Lower arm

Knee/Upper leg

Psychiatric/Psychological

Systemic Other

Foot and toes

Lower leg

Hand andfingers

Back

Shoulder/Upper arm

Sugar ManufacturingAverage monthly payments – stat (14/15)

$293

$117

$176$189$70

$2,068

$3,192$4,376

$3,897

$1,448

$1,872$1,097

$1,096

Headand face

Neck

Trunk

Wrist/Lower arm

Knee/Upper leg


Systemic Other

Foot and toes

Lower leg

Hand andfingers

Back

Shoulder/Upper arm

Sugar ManufacturingNew claims – stat (13/14)

4

8

7

632

30

67

49

27

19

19

Headand face

Neck

Trunk

Wrist/Lower arm

Knee/Upper leg


Systemic Other

Foot and toes

Lower leg

Hand andfingers

Back

Shoulder/Upper arm

Sugar ManufacturingAverage monthly payments – stat (13/14)

$653

$286$248$519

$2,295

$2,488$2,784

$2,374

$5,197$7,701

$1,816

$1,198

Headand face

Neck

Trunk

Wrist/Lower arm

Knee/Upper leg


Systemic Other

Foot and toes

Lower leg

Hand andfingers

Back

Shoulder/Upper arm

23

$722

12

A new approach at this year’s Conference was a full day of rolling workshops, allowing members to get a feel for and workshop some of the changes, and consider opportunities available for improvement. The high level of sponsorship, engagement and participation was encouraging.

At the end of the Conference’s first day, a panel discussion involving CEOs from a number of Milling Council members gave attendees the rare opportunity to hear firsthand some of the concerns and insights on the future of the industry from its most senior people.

Feedback on the Conference has been very positive, but the plan is to do more.

We know we can do better, so we will continue to expand and evolve the Conference’s remit to provide access to some of the latest and up-to-date People & Safety developments to members and the broader industry.

Training and certification

ASMC has recently considered the viability of creating an Industry Registered Training Organisation, aimed at ensuring that skills and capacity are developed and held within the industry. An application has also been made to return the qualification of Certificate III Sugar Milling Operations to the Apprenticeship Funding Schedule.

The year’s developments The ASMC People & Safety Committee, whose members include some of the most inspiring and dedicated Human Resources, Industrial Relations, and Safety and operational practitioners, continues to grow and develop.

Perhaps the most significant milestones for the Committee over this past year have been the strengthening of relationships between the committee members and regulatory and industry stakeholders.

WorkCover Queensland, the Division of Workplace Health & Safety Queensland, and members of the legal fraternity are now regular attendees and participants in the Committee’s quarterly meetings. Perhaps more significantly is the visible and committed leadership shown from the ASMC Board, made up of senior executives of ASMC members who now also regularly attend the quarterly meetings. This deeper connection between the Board and this Committee ensures there is a consistent and clearly understood message that People & Safety values are shared throughout the industry.

People & Safety Conference 2014 — a new approach this year

The People & Safety Conference held over two days in Brisbane early in March 2014 gave attendees the opportunity to hear from suppliers and experts, as well as members who provided some insight into the challenges and innovation in play every day at the point of risk in the mills.

Theresa Jones, Mackay Sugar: The habitual wearing of Personal Protection Equipment (PPE) is essential for the protection of our personnel and the reduction of lost time injuries. Photography: Frank Marchetti

13

Back-to-back training win for Wilmar Sugar AustraliaWilmar Sugar Australia made back-to-back wins at the north Queensland regional finals of the 2013 Queensland Training Awards, taking out the Large Employer of the Year award for a second time. This award recognises ‘outstanding achievement in the area of vocational education and training by a business with 40 or more staff’.

Wilmar Sugar Australia went on to shortlist as a finalist for the Queensland Training Awards state finals, presented in Brisbane in September 2013.

The company has demonstrated a long-running commitment to vocational training, with a strong focus on its apprenticeship program. In November, Wilmar Sugar Australia was named Large Employer of the Year at Tec-NQ’s inaugural gala awards.

Herbert apprentice Lance Roberts also won Apprentice of the Year for diesel-fitting at the awards, while Wilmar Sugar Australia had three more finalists in various sections.

Union de-registered

During the year a decision to deregister the Australian Sugar Milling Association Union of Employers was taken and, as such, this union no longer appears with the Industrial Relations Commission in Queensland. The changes around the Fair Work Commission meant that the union’s registration no longer offered the benefits it once did.

Incident investigations and data-sharing

The sugar industry has made some significant steps in relation to Incident investigations and data-sharing.

As of the end of the financial year 2014, we will be able to provide an almost full-industry picture of statistical data with members agreeing to provide their incident data and information to enable a holistic view.

There has also been endorsement of a consistent approach to investigating significant incidents in the industry. Prominent in this regard is the development of a common Rail Incident Investigation Model, to be used by ASMC members.

The work has not only been centred around the ASMC office. Members themselves have also embarked on several initiatives from plant upgrades to extensive training and development programs aimed at improving risk profiles, as well as the understanding and capacity of its people.

Tully Sugar and Wilmar Sugar are rolling out very strong leadership development programs. Bundaberg Sugar has conducted leadership training and is now rolling out Incident Management Systems to better understand the safety and risk environment. MSF Sugar is working with some of the best known concepts in behavioural change programs and Mackay Sugar and Isis Central have added to their People & Safety talent pool, bringing in fresh ideas and perspectives while adding to the development of diversity within the industry.

Bright future for a robust industryThere have been many other changes across the sugar industry landscape during the year, and while they do not directly impact People & Safety, they nevertheless have an effect on our people and their safety at work. Distractions, changes and uncertainty due to weather, climate and governance, ultimately bring us back to how we perform as an industry.

There have been significant advancements in Risk Profiling and Team Dynamic testing and training. Having the best people in the role, working to their full capacity, is fundamental to a long-term focus.

The Australian sugar industry is robust and buoyant and has capacity to continue to grow, and to succeed long into the future. Members are collaborating and sharing their expertise with each other and the wider industry, which bodes well.

The ASMC continues to review its processes to ensure it is able to best service members’ evolving needs and will continue to look to the future to offer members the optimal People & Safety tools and information available, and to monitor industry changes and risks as they emerge.

Old farm – new ways. Farming in 2014 is now more reliant than ever on ‘smart’ systems — for growing, harvesting, transportation and milling. Photography: Richard Curzon

Wilmar Sugar Australia representatives (from left) Jim Anderson, Pete Townson (also a Tec-NQ Director), Tina Klekar, Mike McLeod, Member for Burdekin Rosemary Menkens and Canegrowers Burdekin Regional Manager Debra Burden (Tec-NQ Deputy Chair), November 2013. Photography: Wilmar Sugar Australia

14

Raw Sugar MillingInitially the project team will review current practices and the scientific knowledge of mill mud use. The team will visit mills and examine the various methods of mill mud storage, transport and application. Regional workshops will be conducted to identify options that will improve practices and reduce the risk of excessive nutrients flowing into waterways and the ocean. Through working with people in the field, the recommendations that are developed will be practical and cost effective.

There is a Beneficial Use Approval (BUA) from Queensland Department of Environment and Heritage Protection (EHP) for the re-use of milling by-products. The research project will enable the development of more regionally specific guidelines for the new BUA from 2015.

Best practice guidelines for the storage, transportation and application of mill mud will also be included in the SMARTCANE Best Management Practice.

Improved use of milling by-products‘Mill mud’ is the residual mud and fibre from the raw sugar juice stream left after sugar milling. For over a century, mill mud has been applied to farms to improve the physical, chemical and biological properties of sugar cane soils. Its nutrient content can be variable and, it has been suggested that if not appropriately managed, has the potential to contribute to sediment, nitrogen and phosphorous run-off into waterways and out into the ocean, including reef areas.

The practices used to transport, store and apply mill mud vary from region to region, and from mill to mill, and hence the environmental risks may vary considerably. A new SRA-funded research project, conducted jointly by CQG Consulting and the ASMC, will provide a better understanding of the environmental risks associated with these current practices and make recommendations for the handling and use of mill mud to manage those risks.

Bundaberg Walkers celebrating the past and futureIn February 2014, Bundaberg Walkers Engineering celebrated the past and future with significant milestones, acknowledging the company’s 125th anniversary and the $2.5 million investment in a new machinery shed and flood mitigation system.

Ray Hatt, Bundaberg Sugar Group Chief Executive Officer, said Bundaberg Walkers has a rich history in the Bundaberg region, growing from humble beginnings in 1888 to achieving a reputation as a world leader in milling technology.

“Bundaberg Walkers has a tremendous reputation for reliable, quality machinery and milling equipment and is managed by a professional team with a diverse range of

skills. Following the 2013 flood the company faced enormous challenges to get our business operational to supply our customers in time for the sugar crushing season. We are proud of the remarkable efforts of our employees and the local authorities at that time. We are also grateful to our shareholders for their investment in expanding our workshop facilities with a new shed, and the provision of a flood wall which can be erected in less than an hour in the event of a flood alert. The company has recently purchased state-of-the-art machinery valued in excess of $4 million to help our business grow so it is of great benefit to our operations to have the protection of the flood wall should we experience another flood,” Mr Hatt said.

Bundaberg Walkers employees demonstrate how quickly the flood barriers are assembled in the new machinery shed. Photography: Bundaberg Walkers

Selective application of mill mud, Mackay region. Photography: Jason Walton

15

MSF Sugar’s returning land to cane secures the future of the sugar industryMSF Sugar’s drive to return land to sugarcane production has contributed to a combined increased output of 200,000 tonnes across MSF Sugar mills.

Over the past two years, MSF Sugar has increased its farm land by almost 10 per cent — in Maryborough 800 hectares, South Johnstone 2,200 hectares and Tablelands 2,000 hectares.

As part of a cane farming operation, MSF Sugar purchased a 1,500 hectare failed teak plantation at South Johnstone. A portion was sold and South Johnstone Mill converted 1,200 hectares, clearing and improving the land and sustainably planting it with sugar cane.

“Returning land to canefields is a considerable undertaking and one we cannot complete without help, so we involve not only new growers but also contractors,” MSF Sugar CEO Mike Barry said.

Half the property was released to growers to help them improve their farming operations, with MSF Sugar farming the remainder.

In the late 1980s, farming practices shifted from cane production to cattle and banana plantations, with the loss of about 13,000 hectares from the sugar industry. MSF Sugar has devised an incentive-based program to return some of this land to cane.

“To help growers establish their farms we offer them low interest loans for three years. So far we have retrieved about 1,800 hectares which is now producing high-yielding cane.

Not only has the scheme increased sugar production, it has benefited the growers and the regions by securing mill and transport operations,” Mr Barry said.

Wilmar Sugar Australia’s Engineering Excellence awardA $10 million project to restore Wilmar Sugar Australia’s Plane Creek Mill’s Number 3 Boiler ahead of the 2013 crushing season earned an Engineering Excellence Award for Project Management.

The boiler sustained substantial damage after a low-water event resulted in significant furnace wall and convection bank overheating late in the 2012 crushing season.

Although emergency repairs were undertaken to enable the mill to finalise crushing, a large boiler re-tube project was required to restore the boiler to full working order — with only six months available to plan, order, schedule and implement the work before the start of the 2013 season.

Wilmar Sugar Australia, together with Aurecon and EDMS Australia, took less than a month to develop a formal scope of work, and EDMS Australia was appointed principal contractor.

To meet the critical timeframes, and procure boiler tubes of more than 10 different sizes, EDMS Australia sourced more than 18 kilometres of combined tube length from Australia, Singapore and Germany to achieve the required quantities.

More than 70 personnel dedicated to the restoration of the boiler were on site at any given time. Over the months of the project, EDMS Australia directed teams of personnel to work 12-hour shifts on a continuous basis.

An excellent combined effort from everyone involved saw the project delivered on schedule, under budget and without any significant safety incidents. Accordingly, Engineers Australia Mackay Region recognised Wilmar Sugar Australia and EDMS Australia for their achievements awarding them an Engineering Excellence Award for Project Management at their annual presentation in November 2013.

Wilmar Sugar Australia’s Plane Creek Mill Number 3 Boiler — an excellent combined effort from everyone involved saw the project delivered on schedule, under budget and without any significant safety incidents. Photography: Wilmar Sugar Australia

16

Queensland Parliamentary Inquiry into rail freight use After processing, raw sugar and molasses are transported by rail or road to the bulk storage terminals at the state’s ports. Over the last decade, the percentage of raw sugar transported from mills to sugar terminals by rail has declined by over 20 per cent. This is a continuation of a decline in the use of rail for raw sugar freight, with mills gradually changing to road due to the escalating costs of (public) rail freight.

The decision to change is not taken lightly. As rail is considered the most efficient transport method, the changeover requires alteration of loading and unloading facilities, which is costly. The most recent switch to road transport occurred at the Plane Creek Mill. However, sugar mills in the Herbert continue to transport raw sugar to Lucinda bulk sugar terminal via mill-owned rail.

The ASA and Wilmar Sugar Australia contributed to the Queensland Parliamentary Inquiry into ‘Rail freight use by the agriculture and livestock industries’.

The resulting report4 recognised the issues facing the sugar and other agricultural industries and made a number of recommendations to improve the attractiveness of rail for use in agricultural freight.

A series of studies on agricultural commodity freight transport by the Queensland Department of Transport and Main Roads will also identify options to help stop the shift to road from rail transport. The first of those studies will focus on raw sugar and molasses freight issues. The rail infrastructure and rolling stock in use for raw sugar and molasses are old, and now require increasing levels of maintenance, so the study will be timely for informing upcoming investment decisions.

The ASMC will continue to work with the Queensland Government on this study and other activities to resolve freight bottlenecks and improve efficiency for the sugar industry.

Transport

4 The Transport, Housing and Local Government Committee of the Queensland Parliament Report No. 45 — Rail freight use by the agriculture and livestock industries, June 2014. Report available from: www.parliament.qld.gov.au/thlgc

Cane rail safety in Bundaberg

A photographer from the Bundaberg NewsMail sets up a scenario of kids playing on tracks for a cane rail safety news story. Photography: Bundaberg Sugar

During the 2013 season, fresh advertising was launched as part of Bundaberg Sugar’s cane rail safety campaign.

Each year, Bundaberg Sugar pays for television and radio advertisements to educate the public on the dangers of racing cane trains at level crossings and kids playing on and around railway tracks. New television and radio advertisements were broadcast to reinforce this critical message.

Robert Powell, Bundaberg Sugar cane Logistics Superintendent, said there were some occasions during the season when motorists raced across level crossings as the lights began flashing.

“Fortunately there were no collisions between vehicles and cane trains. However, there were some issues with vehicles parked too close to railway tracks,” Mr Powell said.

2013 saw a reduction in the number of reported incidents where children were playing on or near cane bins and tracks.

Over time the messages conveyed through the advertising campaign and school visits have helped. During the 2013 season, safety talks were presented to more than 2,000 students. Bundaberg Sugar representatives visited district primary and secondary schools as part of the company’s KOT (Kids Off Trains) program.

A former Bundaberg Sugar cane train driver who is also a member of the Botanic Gardens Australian Sugar cane Railway gave the children an account of experiences from the perspective of a locomotive driver. The children were also shown Bundaberg Sugar’s ‘Take a Safer Ride Instead’ video conveying the message that taking a ride on the cane trains at Botanic Gardens is a safer alternative. These talks were well received by both teachers and students.

There is over 4,000 km of 610mm gauge rail in the Queensland sugar industry. Rail systems are costly to operate and maintenance intensive. However, they provide an efficient way to transport over 25 million tonnes of cane each year, and in doing so, this minimises road damage and congestion. During harvesting season, cane trains are a common and familiar sight in northern Queensland. Photography: Darin Taha

http://www.parliament.qld.gov.au/thlgc

17

Transport data 2003–2013

Tonnes of cane received at mills in Queensland

Tonnes of cane Percentage of total crop

2013 2008 2003 2013 2008 2003

Cane railway 25,537,941 25,984,351 26,920,749 87 88 88

Road 2,231,062 2,267,175 3,438,194 8 8 11

Combination 1,449,939 1,336,722 358,974 5 4 1

Total crop 29,218,942 29,588,248 30,717,917 100 100 100

Tonnes of raw sugar transported to terminal/refinery in Queensland

Tonnes of sugar Percentage of total sugar produced

2013 2008 2003 2013 2008 2003

Public rail 1,342,530 1,800,233 2,763,434 32 42 57

Road 2,303,541 1,885,959 1,551,402 55 44 32

Mill-owned rail 560,274 600,078 533,294 13 14 11

Total raw sugar transported to refinery/terminal 4,206,345 4,286,270 4,848,130 100 100 100

A significant asset. Cane rail systems amount to a huge investment for the industry. With over 4000km of 610mm gauge track, hundreds of locomotives and thousands of bins, the sugar industry is Queensland’s second largest rail operation. Photography: Darin Taha

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Electricity PricingElectricity pricing continues to profoundly affect Queensland’s — and therefore 95 per cent of Australia’s — sugar industry. Following extraordinary price increases yet again across the state, irrigated agriculture is suffering, as farmers are increasingly unable to recover the cost of their production.

Erosion of our industry’s competitiveness

Sugar is the largest irrigated crop in Queensland. When the cost of electricity increases, not only does the cost of the water increase to the farm gate, but the costs associated with then pumping water from farm gate to crop also increases. Industry experience demonstrates that irrigation is one of the first inputs sacrificed by farmers facing financial pressure — which is manageable in a wet year; but in drought years, it is a very different story. Compounding electricity price increases, year on year, are unsustainable, while the price shocks erode the international competitiveness of our sugar regions and the broader industry.

Government intervention is required to regulate

The sugar industry is united in its need for urgent governmental intervention in regional Queensland’s current electricity prices, particularly as the Queensland Competition Authority (QCA) has commenced the price determination process for 2015/16.

While QCA has continued to justify its price-setting methodology, on the basis of cost reflecting prices, the sugar industry is increasingly questioning QCA’s approach. Based on a ‘Network + Retail’ cost-recovery model, the sugar industry is increasingly challenging the validity of a method that is dependent on a network found to be one of the most inefficient operated in Australia.

In 2012, the Queensland Government’s Independent Review Panel on Network Costs found Ergon to be inefficient: with poor management of overhead electricity costs; higher capital expenditure per customer for comparative customer density, compared with interstate services; and higher efficient levels of operating expenditure (among the least efficient of service providers nationally).5

Water StrategyIn June 2014 the Queensland Government released its 30-year Water Strategy.

Although the water strategy focuses on urban water supply, there are also important issues for sugar mills. The cost of irrigation can have a significant impact on the amount of sugar cane produced, which in turn affects the volume being milled each year.

A number of factors determine the cost of irrigation including the prices of water and electricity, the cost of equipment and the timing of electricity tariffs.

Irrigation systems that are water-efficient can save water costs for farmers and are beneficial in saving what are becoming scarce water resources, which will be increasingly important in meeting the government’s target of doubling agricultural production. However, the cost of establishing water-efficient irrigation systems can be prohibitive for individual farmers. Investment in more efficient irrigation infrastructure on farms will be a long-term process driven by cultural and generational change in the industry along with the emergence of more corporate farms. Government initiatives that foster on-farm investment in efficiency are more likely to encourage rapid uptake, particularly among younger farmers who are moving into the sugar industry.

Recycled water

A few sugar mills recycle waste water from the milling process, making it available to irrigate sugar cane crops. Recent amendments to the Water Supply (Safety and Reliability) Act 2008 mean mills no longer need an approved recycled water management plan, unless they start to irrigate crops that require little processing (such as fresh horticultural crops). Only those schemes which supply water for higher exposure uses, such as supplying a dual reticulation system, augmenting a supply of drinking water or for irrigating minimally processed foods, are required to have an approved recycled water management plan.

All existing schemes still need to be registered for possible future reference. For example, if there were a public health outbreak, the existence of a register of schemes would enable prompt and better-targeted investigation.

Queensland’s 30-year Strategies

5 Productivity Commission. 2013. Inquiry into Electricity Network Regulatory Frameworks

A few sugar mills recycle waste water from the milling process, making it available to irrigate sugar cane crops. Although the Quensland Government’s water strategy focuses on urban water supply, there are also important issues for sugar mills. The cost of irrigation can have a significant impact on the amount of sugar cane produced, which in turn affects the volume being milled each year. Photography: Frank Marchetti

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Tully Sugar Mill expansionIn late January 2014, Tully Sugar announced a further $5 million investment in expansion at Tully Mill, to keep up with growth in the area of land planted under sugar cane. Since taking over Tully Sugar Limited in July 2011, COFCO, the parent company — who is the largest supplier of diversified products and services in the agricultural products and food industry in China — has remained committed to expanding the business.

This new $5 million expansion has been an important project to improve Tully Mill’s crushing rate and sugar recovery. It has increased mill capacity from 105 tonnes per hour of fibre to 118 tonnes per hour, and will be installed by the start of the 2015 crushing season. This is equivalent to an increase in the amount of cane crushed from 675 tonnes per hour to 760 tonnes per hour (assuming fibre levels remain consistent with 2013 levels at 15.5 per cent).

This expansion complements the existing project to progressively replace 585 of the older 8 tonne cane railway bin units with 625 new 10 tonne bins by 2018, along with the work currently underway on the Number 1 Boiler and at the evaporator station. Each of these will contribute to necessary improvements in both capacity and factory efficiency.

The industry’s expansion, and matching mill capacity to that expansion, was an undertaking COFCO made during its acquisition of Tully Sugar. Total capital investment by Tully Sugar between 2014 and 2016 is now expected to exceed $40 million.

This new $5 million expansion has been an important project to improve Tully Mill’s crushing rate and sugar recovery. It has increased mill capacity from 105 tonnes per hour of fibre to 118 tonnes per hour, and will be installed by the start of the 2015 crushing season. Photography: Jason Starr

‘Gold-plating of networks’ allows collection of maximum revenues

The underlying problem of extreme electricity prices derives from an increasingly outdated model of supplying regional Queensland via a ‘ribbon network’, transporting generation from one end of the state to the other, with significant transmission and distribution losses. In parallel, electricity networks around Australia are incentivised to overbuild (known as ‘gold-plating’). This ensures allowable revenues collected (as set by the Australian Energy Regulator) are maximised.

Yet Ergon itself has recognised this model is not sustainable. Ergon recently highlighted that it will be cheaper for regional household customers to install solar photovoltaics (i.e. solar panels) with battery storage in 2020, than remaining connected to the grid.

The cost of doing business in regional Queensland is rapidly becoming uncompetitive — and equally unnecessarily complex. While much is made of the government community service obligation (CSO) paid to Ergon, effectively ‘subsidising’ the cost of delivering electricity to regional Queensland, the reality is that this CSO provides an incentive for Ergon to increase its

profits, as the CSO is paid on the difference between the Ergon and Energex network service charges. All conclusions from the Queensland Government’s own reviews, and Federal inquiries, such as the Productivity Commission Inquiry 6 in 2013, and previously, the Senate Inquiry7 into Electricity Pricing in 2012, highlight the significant inefficiencies in Ergon’s pricing model.

Sugar mills in Queensland are paying more than twice that of similar-sized enterprises in Victoria

Sugar mills are paying more than twice the rate per kilowatt hour (kWh) of electricity compared with similar-sized electricity loads in Victoria. Similarly, farmers are paying about a third more for network services than Ergon’s average regulated price.8

These basic anomalies serve to highlight the inequitable tariff arrangements under Ergon. Clearly, an in-depth structural review of Ergon’s tariffs is long overdue; and some interim price relief offered in the meantime until such a review is completed.

Electricity pricing is fundamental to the ongoing viability of the sugar industry, and the many other Queensland agricultural industries. The issue will remain a priority and key focus for the sugar industry and the ASMC throughout the forthcoming year.

6 Productivity Commission. 2013. Inquiry into Electricity Network Regulatory Frameworks 7 Select Senate Committee on Electricity Prices. 2012. Reducing Energy Bills and Improving Efficiency. November 2012 8 Australian Sugar Industry Alliance (ASA). 2014. Submission to the Queensland Competition Authority on Electricity Price Determination for 2015-2016

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There are currently 144 countries10 around the world with renewable energy policy targets. In Australia, this policy is the Renewable Energy Target (RET), where a minimum of 20 per cent of Australia’s electricity, set at 41,000 gigawatt hours (GWh), is required to be sourced from renewable energy sources.

Investment under the RET

Since the inception of the RET, the Australian sugar industry has invested in excess of $600 million in upgrading boilers and refurbishing infrastructure to cogenerate more electricity and steam, with $300 million in the last four years following expansion of the RET from 2 per cent to 20 per cent. These upgrades improve mill efficiency, increase the Australian sugar industry’s international competitiveness and most importantly, build industry and community confidence in the future of the sugar industry, and its dependent, adjacent region, as the payback periods are typically 20 years for large-scale investment.

WIlmar Bioethanol Sarina Distillery. Photography: Frank Marchetti

Renewable ElectricityRenewable energy has been a critical focus for ASMC during 2014.

The policy settings in this sector are pivotal to both the strategic development and the ongoing competitiveness of the Australian sugar industry which has been generating electricity for over 100 years, supplying its own needs and in a number of cases its communities, during each crushing season. All sugar mills are embedded generators, supplying excess electricity to their adjacent communities or co-located industry, through local distribution networks and sometimes transmission networks. Exporting electricity increases the efficiency of bagasse generation at the mill — and the efficiency of electricity delivery in both regional Queensland and upper northern New South Wales.

Cogeneration is vital

For the Australian sugar industry, expanding its cogeneration capability provides a critical revenue stream that enables mills to invest in their existing infrastructure, and begin a transition into advanced manufacturing in the future. This isn’t unique to Australia — in fact, our major competitors such as Brazil, Thailand, and increasingly India, are progressing rapidly along this pipeline of innovation.

Lack of government subsidy

While the Australian sugar industry competes on the international market through its sugar price, our competitiveness is ultimately limited by the crippling cost of production.

Consequently, the policy environment on cross-sectoral issues such as renewable electricity and biofuels is increasingly critical to the industry’s future, as our global competitors are facilitating industry expansion through renewable electricity and biofuel revenues, driven by extensive policy support. In 2012, Brazil was the third highest producer of biomass energy (behind the United States and Germany); Thailand was 19th, and Australia did not rank at all.

However, renewable energy is also critical to Australia’s current and future energy networks, reflecting an ongoing shift around the world towards increasing reliance on renewable electricity generation capacity. In 2013, 56 per cent of all newly-installed electricity generation plant was renewable energy 9, with the proportion significantly higher in developing nations with first-time access to electricity.

Industry Diversification

Renewable energy is critical to Australia’s current and future energy networks, reflecting an ongoing shift around the world towards increasing reliance on renewable electricity generation capacity. Photography: Frank Marchetti

9 Renewable Energy Policy Network for the 21st Century (REN 21). 2014. Renewables 2014 Global Status Report

10 Ibid.

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This level of investment is dependent on a creditable, bipartisan supported RET continuing to operate in Australia. That is, policy certainty for the life of the policy.

Critically, the RET enables market participation for new market entrants in an exclusive market monopolised by fossil fuel generation and concentrated ownership. The assets underneath these government and private entities have been heavily subsidised over the life of the Australian energy market’s development. Most coal-fired power stations, and several gas, have been built through government funding; supported with subsidised fuel, water, fuel transport and auxiliary power; and guaranteed access to favourable long-term power purchase agreements. In parallel, state governments have invested, facilitated and (most) continue to own Australia’s electricity networks — moving electricity generated in remote coal and gas fields, over thousands of kilometres to households with actual demand. Australians, as individuals and a collective society, have benefited from these perverse subsidies with some of the highest living standards in the world.

There was nothing wrong with these subsidies while they remained in the public interest.

However, Australia is now saddled with an oversized, overcapitalised network that state governments increasingly can no longer afford to subsidise; a network addicted to expansion, reliant on the large-scale generation delivered by a system serviced by a few fossil fuel generators, and the major driver of escalating electricity prices. However, these fossil fuel generators are either approaching, or have now passed, retirement age.

Reducing the RET, and therefore removing the downward pressure on wholesale electricity prices exerted by the RET, actually creates an incentive for these inefficient and increasingly costly power stations to continue to operate. The RET provides a compelling opportunity to retire these inefficient power stations to the greater benefit of electricity consumers around Australia.

However this capital investment in regional Australia is also essential to energy security over the forthcoming decades, as:

• Increasing cogeneration capacity at a sugar mill directly reduces the amount of energy required from transmission networks, often reducing the need and subsequent investment in parts of the network. For example, the projects at both Racecourse Mill and Pioneer Mill resulted in Ergon deferring substantial network upgrades — which would otherwise have been passed through in electricity price hikes. (Note that 20 per cent of Ergon’s electricity capacity is used less than 35 per cent of the time.)

• Sugar mills are co-located with growing energy demand. Therefore, when mills generate and supply electricity, more of the electricity makes it to the consumer, as electricity transmission losses are negligible.

• Increasing milling generation reduces the State Government’s CSOs — which are currently carrying the high cost of under-utilised transmission and distribution networks. This will become even more critical when the State Government removes south east Queensland from the uniform tariff policy, leaving only the high-cost end of electricity demand pool behind.

Future investment

Currently, Australian sugar mills generate approximately 1,000 GWh per year of electricity — the equivalent of powering approximately 173,300 homes per year, with 492 MW of installed generation capacity across the sector.

However, there is significant capacity for expansion of generation capacity at existing mills. Based on an average crop of 30 million tonnes of sugar cane, the industry has conservatively estimated a further $1 billion of investment would triple the generation capacity to 1.5 gigawatts (GW), resulting in a total of 8,500 GWh per year available for export. In context, that is the equivalent of supplying over 80 per cent of all of Queensland householders’ electricity demand (see Figure 1 below).

The importance of the Renewable Energy Target(RET) to the Australian sugar industry

4,300growers harvest

371,000hectares

30.5milliontonnes

cane crushed 2013

$300million

invested

1,000 Gwh/yearelectricity produced

Equivalent to

173,300homes per year

Regional employment

Regional economic growth and security

Sugar industryconfidence and growth

Lower electricity prices

Australiansugar industryrevenue 2013

$2billion

24mills in Australia

owned by

8companies

16,000employees

492 MWinstalled capacity

Australia’s International Competitiveness

BrazilWorld’s largest sugar exporter

Supportive government policies

Tonnes sugarcane: 590 MT

Installed generation capacity: 8.9 GW

Target sugarcane by 2020: 13.5 GW

ThailandWorld’s 2nd largest sugar exporter





AustraliaWorld’s 3rd largest sugar exporter

Australian sugar industry competes internationally against the rapidly growing and competitive Thai industry, Brazil, and India, and receives no industry subsidies or protection

Tonnes sugarcane: 30 MT | Installed generation capacity: 0.49 GWPotential with RET: 1.5 GW Further investment unlikely without RET

Facts about the Renewable Energy Target • The RET will decrease each Australian

household electricity bill by $50 in 2020. Beyond 2020, household bills savings would be up to $140 per year.

• The RET has generated major investment.

• The RET has created 1000s of jobs and will create 1000s more.

• Removing the RET will cost a lot more than it will save.

Benefits of the RET to regional Australia• $300 million in the last five years in

energy efficiency and generation in the sugar industry

• Reduces government cost of Community Service Obligations

• Increases regional energy security

• Decreases electricity losses

• Potential further $1 billion investment in existing sugar mills.

$1 billionpotential

sugar investment

For more information on the RET including all sources visit www.asmc.com.au

4.36milliontonnes

sugar produced2013

Figure 1

22

Of considerable disappointment, the recommendations of the report did not reflect the key findings of the report.

Sensible policy In effect the RET policy is sensible policy. At a time when Australia’s electricity demand is falling because of declining manufacturing, and individual household take-up in solar, the RET is facilitating lower wholesale electricity prices by virtue of being ‘must run’ generation. Further, the ‘transfer of equity’ from fossil fuel generators to renewable energy generators is a deliberate outcome of the RET policy. This is covered extensively in a report prepared by Carbon + Energy Markets (CME), available on the ASMC website. The suggestion that 26.7 per cent of Australia’s energy mix will be renewable by 2020, if the RET remains at 41,000 GWh, is based on adjusting the figure upwards to account for the avoided distribution and transmission losses delivered by distributed energy. That is, large-scale and household-scale renewable energy is located with demand, therefore the losses are significantly less.

The RET creates a compelling case for the exit of retirement-age fossil fuel generators, to enhance the efficiency of Australia’s electricity network, and lower the cost of delivered electricity to Australia’s everyday energy consumers.

The government has not endorsed the recommendations of the Warburton Review, and has commenced negotiations with both Labor and crossbench parties to find a bipartisan view on the RET’s future. In the interim, the Climate Change Authority has commenced its legislated review of the RET.

A bipartisan, fully functional RET policy is critical to ensuring Australia’s sugar industry remains internationally competitive, while delivering benefit to our regional communities, and transitioning the Australian energy economy. And the industry remains optimistic that common sense and preservation of the RET policy for the betterment of Australia will prevail over the current negotiations.

BiofuelsThe policy environment for alternative fuels has taken a step backwards in the past year, with the one major policy mechanism — favourable excise treatment for biofuel producers — commencing a windback in 2014.

In February 2014, the Bureau of Resources and Energy Economics (BREE) produced a report12 on the Ethanol Production Grants Program, effectively recommending the program’s cancellation.

The RET has provided some means for large-scale renewable energy generators to overcome the significant financial subsidies to the fossil fuel generation sector. However, a fundamental difference is that where the RET provides a subsidy, it has a multitudinous effect on lowering the overall cost of electricity to the consumer — and lowers the cost of subsidising fossil fuel generation.

At a time when the rest of the world marches up the path of diversified electricity generation, decoupling energy intensity and emissions, and increasing localised energy security, maintaining growth of Australia’s renewable energy sector will be increasingly important to Australia’s competitiveness, given that the cost of energy is ubiquitous to productivity performance (see Figure 2 above).

The ‘Warburton’ RET Review

A key focus for ASMC throughout 2014 has been the RET policy review, chaired by Dick Warburton for the Federal Government.

In the same way as electricity prices have escalated, so has a range of voices increasingly attributed exorbitant electricity price increases to the RET. While a legislated ‘review’ of the RET was scheduled for 2014, this was a different type of review, with a focus outside of the legislated review requirements, largely driven by political and media inference that the RET was driving exorbitant electricity prices.

One of the key findings of the Warburton Review, consistent with numerous independent agencies such as the QCA11 and the Independent Pricing and Regulatory Tribunal (IPART), was that the RET is a minor component of the cost of electricity for all consumers, typically around 3–4 per cent of an electricity bill.

The key messages of the Warburton Review were:

• The RET will result in greater than 20 per cent renewable energy penetration of Australia’s electricity generation sector.

• The RET is a subsidy, transferring equity from fossil fuel generators to renewable energy generators.

• There is an oversupply of generation capacity in Australia’s network, therefore further renewable energy investment is not needed.

11 Queensland Competition Authority’s Price Determinations for 2012, 2013, and 201412 Bureau of Resources and Energy Economics (BREE). 2014. An assessment of

key costs and benefits associated with the Ethanol Production Grants program. February 2014. Department of Industry

Figure 2

The importance of the Renewable Energy Target(RET) to the Australian sugar industry

4,300growers harvest

371,000hectares

30.5milliontonnes

cane crushed 2013

$300million

invested

1,000 Gwh/yearelectricity produced

Equivalent to

173,300homes per year

Regional employment

Regional economic growth and security

Sugar industryconfidence and growth

Lower electricity prices

Australiansugar industryrevenue 2013

$2billion

24mills in Australia

owned by

8companies

16,000employees

492 MWinstalled capacity

Australia’s International Competitiveness

BrazilWorld’s largest sugar exporter





ThailandWorld’s 2nd largest sugar exporter





AustraliaWorld’s 3rd largest sugar exporter

Australian sugar industry competes internationally against the rapidly growing and competitive Thai industry, Brazil, and India, and receives no industry subsidies or protection

Tonnes sugarcane: 30 MT | Installed generation capacity: 0.49 GWPotential with RET: 1.5 GW Further investment unlikely without RET

Facts about the Renewable Energy Target • The RET will decrease each Australian

household electricity bill by $50 in 2020. Beyond 2020, household bills savings would be up to $140 per year.

• The RET has generated major investment.

• The RET has created 1000s of jobs and will create 1000s more.

• Removing the RET will cost a lot more than it will save.

Benefits of the RET to regional Australia• $300 million in the last five years in

energy efficiency and generation in the sugar industry

• Reduces government cost of Community Service Obligations

• Increases regional energy security

• Decreases electricity losses

• Potential further $1 billion investment in existing sugar mills.

$1 billionpotential

sugar investment

For more information on the RET including all sources visit www.asmc.com.au

4.36milliontonnes

sugar produced2013

23

Cessation of the Ethanol Grants Program was announced in the May 2014 Federal Budget, to take effect from 1 July 2015, to be replaced by a concessional ethanol excise scheme. Similarly, the Cleaner Fuels Grant Scheme was revoked, with concessional excise applied to domestic, but not imported biodiesel.

The government also signalled the re-introduction of indexation of the general fuel excise rate, relative to CPI, applied to diesel and petrol in Australia, commencing in August 2014.

In the case of ethanol, excise will apply to ethanol from 1 July 2016, at 0 cents/litre, ramping up to 12.5 cents/litre by 1 July 2020. The 12.5 cents/litre is consistent with excise treatment of other alternative fuels, and is based on the equivalent of 50 per cent of the standard fuel excise, after adjusting for energy content.

The government has, however, maintained customs duty for imported ethanol at the excise equivalent of 38.143 cents/litre. Hence the excise margin between domestic and imported ethanol will reduce from 38.143 cents/litre to 25.643 cents/litre by 1 July 2020 (before indexation).

Until this recent change, domestic ethanol production has effectively been excise-free for domestic production, to encourage a local industry. However, the vacillation in biofuel policy over the last 15–20 year period, and in particular, the lack of ongoing certainty for ethanol producers, coupled with state governments waxing and waning enthusiasm for biofuels, has stymied industry investment.

This is the third policy change for ethanol in the last four years. However, the real challenge for ethanol producers is who will pay for the excise on fuel. To date, producers have typically passed forward the benefit of excise relief (ie the producer grants subsidy, which directly offsets excise) — and therefore they have no capacity to absorb the cost of excise.

The question will be whether there remains sufficient price differential at the pump to encourage consumers to purchase ethanol-blended fuel. While ethanol has been the mainstay of next generation diversification for sugar industry aspirations, increasingly, the industry continues to explore sophisticated options that open the door to a range of bioproducts. As always, adoption of next-generation technologies is underpinned by the need for some critical policy certainty.

Marian Mill Cogeneration Efficiency Project

Following the successful commissioning of the Racecourse Mill 38MW Cogeneration Project in March 2013, Mackay Sugar continued with the construction and commissioning of the Cogeneration Efficiency Project for the 2013 season.

This suite of six sub-projects totalling $16.1 million was approved in September 2012 following the awarding of a $9.1 million grant under the Commonwealth Government’s Clean Technology Food and Foundries Investment Program.

Projects included:

1. Upgrade of Marian Number 3 Boiler

2. Marian Bagasse Outloading Facility

3. Farleigh Bagasse Outloading Facility

4. Racecourse Pressurised Feedwater

5. Energy Metering

6. Energy Efficiency Training.

The Marian Number 3 Boiler upgrade was the major project and this involved the replacement of the boiler heat recovery plant with a large feedwater economiser, a series of hot water air heaters, and the installation of four wet centrifugal

dust collectors. The improved Number 3 Boiler efficiency, together with targeted maintenance expenditure on Marian Number 1 Boiler, allowed the closure of the inefficient Number 2 Boiler and the production of an extra 45,000 tonnes per annum bagasse for the Racecourse Cogeneration project. DGH Engineering was the main site contractor, and the project was successfully commissioned at the start of the 2013 crushing season.

The new Bagasse Outloading Facilities at Marian and Farleigh were designed to maximise bagasse truck payloads, reduce loading time and improve dust management. With over 100,000 tonnes per annum of bagasse movements predicted from Farleigh and Marian to Racecourse Cogeneration, efficient facilities were needed to replace old plant. WDT Engineers was the main contractor and both facilities were also commissioned at the start of the 2013 crushing season. The Racecourse Pressurised Feedwater system and Energy Metering were designed to improve energy management at Racecourse Mill, while the training was directed at both operating and supervising personnel to improve understanding of the sugar factory energy balance.

Further to these projects, Mackay Sugar also completed and commissioned a new 45,000-tonne bagasse storage pad at Marian Mill, complying with stringent development approval conditions. The outcome from these integrated projects has resulted in Mackay Sugar transporting large quantities of stored bagasse to Racecourse for the non-crush operation of the Cogeneration plant and adjacent Sugar Australia Refinery. This has displaced high-cost coal (typical non-crush fuel), increased the generation of renewable electricity certificates and reduced the carbon emission liability for both Mackay Sugar and Sugar Australia.

A similar boiler efficiency project is planned for Farleigh Mill in 2015, which will provide further surplus bagasse and displace virtually all coal usage at Racecourse Mill.

Mackay Sugar’s Marian Mill Cogeneration Efficiency project. For the Australian sugar industry, expanding its cogeneration capability provides a critical revenue stream that enables mills to invest in their existing infrastructure, and begin a transition into advanced manufacturing in the future. Photography: Mackay Sugar

24

In 2014 it is estimated that the world will have consumed around 180 million metric tonnes (raw value) of sugar. Each additional per cent of growth therefore adds almost 2 million to worldwide consumption.

This growth in consumption is starting to drive a shift in the sugar market. The coming year looks set to be more balanced, with initial figures showing that production and consumption will roughly match.

This more balanced view is almost driven entirely by consumption growth, with global production expected to be largely unchanged from the 2013/14 seasons. Despite this, in the short term the world market remains under pressure as increased demand has not been sufficient to meet plentiful export availability, leading to an overhang of unsold sugars on the world market which still needs to be resolved.

Price correction neededIn the medium term a catalyst is needed to drive a change in sentiment (and direction) in the market. Until prices rise to levels that remunerate producers, rising consumption levels will see the market trend towards a greater deficit. With global availability dependent on Brazilian prospects in particular, the mounting costs of production and ongoing closure of mills there indicates that we are a way off from the price level required, and that for every day that passes at around current levels, a more severe price correction will need to occur.

Growing financial pressuresProducers worldwide are facing growing financial pressures.

Falling world market sugar prices are now failing to cover the costs of production in leading sugar regions, and consequently producers are seeing a reduction in income, which in many cases is leading to increased levels of indebtedness in the milling sector.

Nonetheless, continued government support in a range of countries such as India, China and Thailand has ensured that farmers have been reluctant to move away from sugar cane to alternative crops, although in the longer term this level of support is unsustainable.

The 2013/14 sugar season has therefore been the third successive year of production surplus, with stocks growing by more than 20 million tonnes globally cumulatively over this period. Prices have fallen to lows not seen since 2010.

However, lower prices are positive for global consumption. In the three years before the Global Financial Crisis in 2008, consumption had been rising at around 3 per cent annually. This growth rate then fell to around 1 per cent per year between 2009–2011 as the sugar market rallied to multi-year highs above 30 cents per pound.

However, more recently, growth in consumption has started to pick up once again, and today is approaching levels seen in the middle of the last decade, above 2 per cent per year.

TradeContributed by Stephen Geldart, Senior Analyst, Czarnikow Group Limited, September 2014

The Queensland sugar industry’s bulk storage capacity is unheralded amongst sugar trading nations providing the opportunity for year round supply arrangements for key customers. Photography: ASMC

Season’s end – in the empty yard December 2013. Photography: Declan Passlow

25

Richard CurzonOld farm, new ways

Richard CurzonLearning things from Grandad

Sue Blackburn New babies

Overall competition winner

Winner, Strength of community category

Winner, Value chain category

Winner, Landscapes and seascapes category

Declan PasslowSeason’s end – in the empty yard

Spirit of the Sugar Industry Photography Competition 2013/14Delighted by the selection of photos spanning a broad range of aspects in the sugar industry, ASMC was pleased to announce earlier in the year the winners of the 2013/14 photography competition. This competition will be on a temporary hiatus for the coming year, but please keep watching the ASMC website and Facebook page for future updates.

The judging panel chose the first prize, and then a winner from each category. Entries were split into the following categories:

• Valuing our people • Value chain • Strength of community • Landscapes and seascapes

The winning entries were published on the ASMC’s website and also feature in this Annual Review.

The winners were notified in June 2014. Here again are the wonderful winning entries. Our deepest thanks go to everyone who entered the competition, and also to our judges.

Congratulations to our winners!

For more details, visit www.asmc.com.au26


27

ASMC Members

Bundaberg Sugar Ltd

Chief Executive Officer and ASMC Director: Ray Hatt Mills: Millaquin, Bingera

Bundaberg Sugar remains one of the largest sugar cane growers in Australia and is part of the Belgian family-owned Finasucre Group. From the 2011 season it has continued to operate its two Bundaberg factories and the associated Millaquin refinery. Bundaberg Sugar Ltd also owns Bundaberg Walkers Engineering Ltd.

Isis Central Sugar Mill Company Limited

Chairman: Peter Russo Chief Executive Officer: John Gorringe ASMC Director: John Gorringe

Isis Central Mill, located in Childers, has been crushing cane since 1896/1897. This grower-owned mill is the major contributor to the district’s economy. It was the first mill to produce Queensland High Pol brand Sugar. The company operates a cane farming business on owned and leased land that produces in excess of 170,000 tonnes per annum.

Mackay Sugar Limited

Chairman: Andrew Cappello Chief Executive Officer: Quinton Hildebrand ASMC Directors: Quinton Hildebrand, Andrew Cappello, Bill Phillips-Turner Mills: Farleigh, Marian, Racecourse and Mossman

Mackay Sugar is Australia’s second largest sugar milling company, with over 140 years’ experience and an annual turnover in excess of $300 million. The company has four operating milling sites at Farleigh, Marian, Racecourse and Mossman and holds a 25 per cent interest in Sugar Australia and New Zealand Sugar Company. Its products include raw and refined sugar, molasses and electricity (made from renewable sources).

MSF Sugar Limited

Chairman: Isara Vongkusolkit Chief Executive Officer and ASMC Director: Mike Barry Mills: Mulgrave, South Johnstone, Tableland, Maryborough

MSF Sugar Limited is a fully owned subsidiary of Mitr Phol Sugar Corp. Ltd (Mitr Phol) of Thailand. Mitr Phol is one of the largest global producers in the sugar industry. In addition to its operations in Australia it also has major investments in both Thailand and China.

MSF Sugar, having started as a single milling operation based in Maryborough in 1886, now has additional milling operations in Gordonvale, South Johnstone and the Atherton Tableland. This provides a total milling capacity of approximately 4.7 million tonnes of cane per annum and its operations include transport infrastructure and farming properties to support these mills. All raw sugar produced in its four mills is exported into overseas markets. In addition it has invested in Sugar Terminals Limited, the owner of six Bulk Sugar Terminals located in Queensland.

Tully Sugar Limited

Chairman and ASMC Director: Dick Camilleri Chief Executive Officer: Alick Osborne

Built in 1925, Tully Sugar Mill has a long history of investment and expansion to the point where it now has the capacity to crush up to 725 tonnes of cane per hour and services a cane supply area in excess of 27,000 hectares. In 2011 Tully Sugar Limited was wholly acquired by Chinese-owned agribusiness COFCO Corporation.

The mill services a cane supply area in excess of 27,000 hectares. It crushes cane at up to 725 tonnes per hour and reliably supplies 10MW of renewable energy into the State electricity grid during the crushing season. The company also owns and operates five sugar cane farms in the area with a combined productive capacity of between 80,000 and 90,000 tonnes depending on seasonal conditions.

Wilmar Sugar Australia Limited

Executive General Manager North Queensland: John Pratt General Manager Cane Supply and Grower Relations: Paul Giordani General Manager Operations: Michael McLeod ASMC Directors: John Pratt, Russell Abotomey Mills: Macknade, Victoria, Invicta, Pioneer, Kalamia, Inkerman, Proserpine, Plane Creek

Wilmar Sugar Australia Limited owns and operates eight raw sugar mills in Queensland and operates an ethanol distillery at Sarina. In a joint venture with Mackay Sugar Limited, it operates sugar refineries in Mackay and Yarraville. Through the New Zealand Sugar Company Limited, also a joint venture with Mackay Sugar Limited, it operates a sugar refinery in Auckland, New Zealand. Wilmar Sugar administers Australian Molasses Trading Pty Ltd. Other sugar-related activities include marketing ethanol, solvents and specialty chemicals; owning and operating sugar cane farms; operating large-scale electricity cogeneration plants at Victoria, Invicta and Pioneer mills.

Acknowledgments

The Milling Council would like to thank the winners and entrants to this year’s photography competition for their images and its members, and staff and others attributed in this Annual Review for the remaining photographs provided. Finally, the Milling Council would like to thank each of the individuals who agreed

to be profiled for this year’s Annual Review. These profiles are featured on our website.

For more details about the work of the ASMC, visit asmc.com.au


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