GrainCorp's renovation rumble

15 May, 2015 02:00 AM
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The company hoped to reduce rail costs by $5 a tonne as part of the project

EAST coast bulk handler GrainCorp is allocating $60 million for site upgrades as part of its $200 million Project Regeneration program announced last year.

As part of this round of capital expenditure, there will be upgrades at 11 sites across Queensland, NSW and Victoria; and two new sites constructed, at Yamala, near Emerald in Central Queensland, and Calleen, in the northern Riverina in NSW.

GrainCorp officials could not confirm the last time the company built new greenfield sites, but it is over a decade.

GrainCorp chief executive Mark Palmquist said the new sites were in areas where there was no suitable existing site to renovate.

“We have retro-fitted sites where it is possible, but in these cases it wasn’t, so we will start from scratch.”

He said the company hoped to reduce rail costs by $5 a tonne as part of the project, as well as return a million tonnes a year, currently moved by road, to rail.

Dan Cooper, chairman of the NSW Farmers Association's grains section, said the investment was good for growers.

“Obviously growers in the areas with sites that get upgrades will be pleased, especially if they see an extra $5 a tonne in their pocket.

“That figure is on the public record and we’ll be following up to see whether it materialises.”

State government support

Mr Palmquist said the works were made possible by complementary investments by State governments.

“We commend NSW for their work on the branch lines there which will allow us to get full value from our investments.”

Mr Cooper agreed.

“If the government hadn’t made its investment, GrainCorp wouldn’t be spending its money at these sites.”

The works at each site fall broadly into four categories: new sites, new high speed over-rail loaders at existing sites, upgrades to existing rail loading infrastructure and capacity expansion.

Mr Palmquist said he expected most work would be complete for the upcoming winter crop harvest, with the rail outloading program due next year.

Geographically, he said the sites were in key areas.

“They fit in well with our plans to try and integrate our supply chain.”

He said the benefits would be immediately apparent to customers.

“We’ll see reduced complexity, faster rail loading times and shorter train cycle times will increase the volume of grain transported by rail and reduce supply chain costs, which translates to improved grower returns.”

He said the first year of the Project Regeneration process last year had provided a lot of lessons.

“We learnt a lot about what works and what doesn’t last year.

“One of the keys is to get better flexibility so we can best serve customers in the areas that need it.”

Mr Palmquist said GrainCorp had identified grain movement as the key focus in its upgrades.

“It is not about creating new capacity, but allowing faster grain movement, whether that be by quickening loading times by pre loading or surging capacity or whatever it is.”

Mr Cooper said cutting supply chain costs, especially in north-west NSW, where storage, handling and transport costs can make up a third of the grain price, was a crucial focus for the industry.


The sites scheduled for upgrades are:

New country sites:

Yamala, near Emerald (Qld)

Calleen, near Ungarie (NSW)

New over-rail loading equipment:

Nevertire (NSW)

Ardlethan (NSW)

Upgrade to existing infrastructure:

Narrabri (NSW)

Burren Junction (NSW)

Spring Ridge (NSW)

Junee (NSW)

Oaklands (NSW on Vic rail network)

Tocumwal (NSW on Vic rail network)

Rainbow (Vic)

Murrayville (Vic)

Capacity expansion:

Red Bend (NSW)

Ardlethan (NSW)

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FarmOnline
Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media
Date: Newest first | Oldest first

READER COMMENTS

Jock Munro
15/05/2015 4:33:09 AM

And Dan what might you do if growers do not receive a saving of $5.00 per tonne from Graincorp?! The Graincorp story is one of tragedy for the industry in Eastern Australia.
Get real
15/05/2015 6:31:26 AM

Mr Cooper should do his research before making comment especially considering the Calleen site is going to be in completely the wrong spot just like the Ungarie Bunker site it is supposed to be replacing. No wonder NSW Farmers is losing so many members in that region around West Wyalong when stupid comments like these are made. Graincorp had a better solution put to it by their customers in that area but they have chosen to ignore it. Money appears to be no object.
Amused
15/05/2015 4:31:43 PM

Get Real, when your running with the big boys but way out of your depth it's just easier to be the mouthpiece for them and they might put you on some committee with a big name but of little importance as a reward.
Percy
16/05/2015 1:53:43 PM

Graincorp does not seem to want to listen to growers so maybe the grower silo committees are not doing their job properly.

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