Peak sugarcane industry body CANEGROWERS is calling on Sugar Terminals Limited (STL) to explain the reasoning behind its decision to abandon a long and successful commercial partnership with Queensland Sugar Limited (QSL) for the operation of the state's bulk sugar terminals.
CANEGROWERS Chairman Owen Menkens said the bulk sugar terminals, which give Australian sugar a competitive edge over other sugar exporting nations, were built on the back of investment by growers, but STL had failed to consult growers before announcing its decision.
"These terminals are industry assets, and they remain one of our main competitive advantages, allowing Australian sugar to be traded as a reliable, high quality, sustainable product into our most valuable markets in a timely manner," Mr Menkens said.
"There seems little justification for this change and it appears to be more about corporate manoeuvring."
Mr Menkens also questioned why STL had not made clear in its public statements that the current operating agreement with QSL requires a three-year notice period.
"STL have not consulted with anyone in industry about this matter and they have chosen to not make it clear that their agreement with QSL has a three-year notice period," he said.
"While technically CANEGROWERS has no say in this agreement, given their stated intent, we call on STL to clearly explain to growers why they are determined to take this course of action."
There is no disputing that QSL has operated the terminals safely and efficiently, and its performance has been highly scrutinized.
CANEGROWERS is now calling on STL to make clear:
- how they intend to operate the terminals to deliver lower operating costs and an improvement in efficiency
- how these cost savings will flow through to growers
- what the forward operating strategy is for the terminals
- how STL will ensure this strategy is used to benefit the Australian sugarcane industry and not be distracted seeking alternative business models driven by a focus on shareholder returns.
"The successful operation of these terminals is vital to the overall success of Australia's sugarcane industry," Mr Menkens said.
"QSL's smooth and efficient operation of our terminals has ensured the industry maintained a competitive edge. This move by STL is threatening that competitive advantage and growers are rightly concerned. They deserve an explanation."
