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By HARRY CLARKE
A RURAL community in Far North Queensland this week faces economic disaster, as lobbyists plea for a $10 million State Government support package they say would be enough to save its 130-year-old lifeblood industry from the brink of collapse.
Creditors will meet on Thursday to decide on the future of Far North Milling, the troubled company which operates Mossman’s sugar mill and which is relied on by 20 percent of the town’s workforce.
Poor yields in recent years blamed on unfavourable weather, rising input costs and low sugar prices have put the local mill in a dire financial situation, despite having received $45 million in federal and state grant funding since 2019.
Far North Milling and its parent company Daintree Bio Precinct were placed in voluntary administration in November amid millions of dollars worth of debt and consecutive years of operational loss.
In a report issued last week, administrator John Goggin recommended creditors liquidate the companies at this week’s meeting unless a third party steps in to salvage Mossman’s historic sugar milling operations.
“This would be disastrous for Mossman,” Port Douglas Shire mayor Michael Kerr (pictured) told the Caller.
“It would absolutely decimate this area. We’ve just gone through a major natural disaster so we’ve already lost over $90 million in tourism in the last few months.
“The sugar industry brings in about $180 million a year into the economy in this region, so it’s really going to hurt if we lose that as well.
“The consequences are dire because not only will the sugar industry be affected, but hundreds of workers around Mossman – the plumbers, the engineers, all those people that live in town that assist the mill that have businesses.
“All of those people have wives and children that go to the schools and work in other businesses. If their main income is lost through the sugar industry closing down, that’s a lot of people leaving Mossman.”
Agriculture minister Mark Furner told the Caller that Far North Milling’s developments would be watched closely this week, while encouraging any interested parties to engage with administrators as soon as possible.
“I recognise the significant impact that the closure of the mill would have on the growers, mill workers, local businesses, and the broader community,” Furner said.
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“The Queensland Government will work closely with the Mossman community to provide support through this difficult process.
“The Government’s response to these developments is under careful consideration and we hope to be in a position to announce that response next week.
“The Queensland Government has provided $22 million in support to Far Northern Milling and related entities since 2019.”
The $10 million pitch
Sugar industry peak bodies Queensland Cane Growers Organisation (CANEGROWERS) and Australian Cane Farmers Association (ACFA) have been pleading desperately with the State Government to underwrite the Mossman sugar industry’s 2024 and 2025 harvest seasons.
ACFA spokesman Jack Murday, a fifth generation Mossman cane farmer, said a government bailout of $5 million per season for 2024 and 2025 would enable the local mill to cash in on soaring sugar prices, which bounced back mid way through last year’s harvest.
“The reason we got to this stage is because last year’s crop was down over the whole northern region by 15-20 percent due to weather,” Murday (picture below) said.
“You take that off the bottom line and it’s almost the exact hole that we’re in now.
“The growers are the ones who are losing out because we have put this year’s crop in the ground, we‘ve spent $12 million establishing this crop and there is $40 million in cane sales that would be lost (if the mill closes down).
“If we don’t get this crop off, the vast majority of farming enterprises will fold and 560 direct jobs will be lost – that’s 20 percent of the Mossman population.
“We’ve seen a large increase in the price of sugar in the past 12 months, so it’s possible that this season and 2025 are viable, but they’re still in a financial deficit.”
CANEGROWERS Mossman chairman Matt Watson said farmers in the region had been sacrificing significant percentages of their sugarcane revenue to prevent the mill from shutting down, making already challenging recent seasons more difficult.
“Since 2019, Mossman growers have been paying a $2 per tonne Sustainability Levy to ensure the Mossman Mill could continue crushing. That’s more than $7 million that growers have contributed to mill operations,” Watson said.
“On top of this, local growers have already invested $12 million to establish the 2024 crop. It is critical that this crop is harvested and processed so that growers can recoup this investment and maintain their future financial viability.”
Viability in renewable energy
For the past three years a bold plan has been afoot to convert the Mossman sugar mill into a producer of biofuel, a renewable energy source created using waste products from milled sugar cane.
Biotech startup Helmont Energy believes it can create an economically sustainable business on the Mossman mill site, generating biodiesel to supplement an exisiting scheme which powers remote communities across Cape York.
“The key project hurdles centre around the future of the Mossman Sugar Mill and the ability for the project to obtain an offtake agreement for the renewable fuel product,” Helmont Energy director Mark Jonker told The Cairns Post earlier this month.
Helmont has expressed strong interest in partnering with the mill in a renewable energy venture but hasn’t been prepared to spend capital on the mill to underwrite its 2024 and 2025 seasons.
“The critical part here is the state government agreeing to go into an off take agreement with Helmont Energy and for some reason or another they have just refused to do that,” Federal MP for Leichhardt Warren Entsch told the Caller.
“These guys have done so much and they’ve gotten so close but you need that last little bit to get over the line.
“Given that investment has been there, I think it’s disappointing that they are not prepared to finish the marathon.
“You’ve got a partner there in Helmont that already has funding capacity to be able to make this project work but they can’t make it work unless they’ve got an off take agreement with the State Government.”
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ACFA spokesman Jack Murday said State Government invesment for a further two years would buy enough time for the biofuel project to become established and would also contribute to the government’s long term rewewable energy targets.
“Early indications suggest that it would be profitable and there’s a lot of private money there to get it off the ground,” he said.
“The plant is predicated to be a $300 million capex build, which is huge, but once the feasibly study is done, it’s bankable and it’s a lot easier to get private money.
“The private bio energy groups have said that they’re willing to help the mill transition to a bioenergy hub, but they’re not interested in propping up the sugar mill.
“We can’t rely on that sugar price staying up there, so the longer term future is bioenergy.”
Port Douglas Shire mayor Michael Kerr added: “We’re certainly hoping that the state government will step up and invest in the sugar industry because if this is a successful transition to the biofuels that will affect the sugar industry throughout the whole state.
“It’s going to cost both state and federal governments a lot more to transition to something else. These two companies – they’re international companies, they’re not little players so they’re already established in what they do,” he said.
“The best alternative model is to invest in this industry and the benefits would be far more than just Mossman. Once this is up and running it will show a model that other mills can look at.”