Sugar Terminal Ltd sparks anger over plan to replace operator

The sugar industry is in uproar over plans to change the way Queensland’s bulk sugar terminals are operated. Here’s why.

Moves to cut costs by replacing the operators of Queensland’s sugar terminals, including at Townsville, has been received with shock and anger by growers, employees and managers.

NSX-listed Sugar Terminals Ltd, which owns the terminals, has announced it will “insource the operations” to drive efficiencies and remove a conflict of interest.

But the operator, not-for-profit Queensland Sugar Ltd, doubts savings will be achieved when its status provides tax advantages running to more than $1m a year.

It also refutes any perceived conflict of interest justifies the move.

Queensland Sugar CEO Greg Beashel said it was “unbelievable” STL would announce such a major change without consulting with it or industry stakeholders.

“There’s a fair bit of anger in the sugar industry,” Mr Beashel said.

Raw sugar stored in one of the sugar sheds at Townsville port.

The terminals employ 150 people including almost 70 in Townsville and Lucinda. There are fears jobs are at risk through automation.

One of the Townsville sheds is the largest in Australia and can hold 470,000 tonnes of sugar.

In a statement, STL chair Mark Gray said a simplified structure would steam line operations, eliminate duplication and remove inherent conflicts of interest.

Re-roofing under way in a sugar shed at Townsville port in 2021. Picture: Evan Morgan

“Unnecessary duplication exists due to the allocation of costs incurred from the QSL board, executive, support functions, insurance policies and auditing requirements, amongst others,” Mr Gray said.

“Removal of duplication in corporate overheads will ultimately deliver a permanent reduction in costs. It will also clarify accountabilities and responsibilities while delivering greater transparency and the potential for further cost efficiencies for the sugar industry.”

Mr Beashel said QSL had always taken its obligations to ensure its operations and marketing divisions were managed and operated separately.

He said STL must consider the full transitional costs as well as the savings derived from its not-for-profit status.

“They say they can do it cheaper but have provided no details,” Mr Beashel said.

Canegrowers chair Owen Menkens said it appeared to be more about corporate manoeuvring.

“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.

Mr Menkens called on STL to make clear how they intended to operate the terminals, how any cost savings would flow to growers and what the operating strategy was for the terminals.

STL says it will engage “directly” with affected QSL employees, while QSL says it will continue to operate the terminals until at least June 30, 2026.

Originally published as Sugar Terminal Ltd sparks anger over plan to replace operator