Newspaper article The Daily Mercury (Mackay, Australia)

Removal of Terminal Threat Angers Miller

Newspaper article The Daily Mercury (Mackay, Australia)

Removal of Terminal Threat Angers Miller

Article excerpt

Byline: Emily Smith emily.smith@dailymercury.com.au

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

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

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

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

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

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

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

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

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

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

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