After decades of QSL operating Queensland’s bulk sugar terminals on behalf of our industry,
terminal owner Sugar Terminals Limited (STL) has announced that it will stop current arrangements with QSL and run the terminals itself.
This announcement should ring very loud alarm bells for every cane grower in our state
The separation of asset owner (STL) and asset operator (QSL) was an intentional move by the
Queensland government when the terminals were privatised 20 years ago and protects our industry from a monopoly owner-operator controlling our only pathway to export markets.
STL’s decision to remove QSL from the terminals was made with no industry consultation and places these crucial industry assets – paid for by Qld growers and millers – solely in the hands of a company focused on shareholder profits rather than the best interests of Queensland sugar producers.
Despite widespread industry outrage following their announcement, STL has refused to meet with this group to detail the business case behind their decision, and address our very significant concerns about the future of our industry’s terminal assets.
Our concerns include:
Unregulated monopoly owner-operator of our industry’s assets
Current terminal operator QSL is an industry-owned organisation that has successfully operated the bulk sugar terminals for decades. It provides its services for no margin and on a cost-recovery basis only, leveraging its not-for-profit status and tax concessions to minimise costs for Queensland sugar producers. In contrast, STL is a public company that is driven primarily by maximising profits for its
shareholders, rather than serving the best interests of our industry. The Queensland sugar industry is their revenue base and removing QSL’s oversight of terminal operations will see STL become a monopoly owner-operator with unregulated control of our export infrastructure.
The cost of change
Despite claims that it will reduce operating costs by taking over terminal operations from QSL, STL has already admitted that the savings they have touted by removing ‘duplication’ will effectively be cancelled out by the loss of the savings associated with QSL’s not-for-profit status. STL has released no costings on how it – a company with more board members than employees and no experience in running a sugar terminal – will run the terminals for less. STL already has a poor track record on costs, and since taking over the Storage and Handling Agreement in FY2018 has increased charges to
industry while QSL has reduced operating costs during the same period.
Who really runs the show?
While STL was initially set up by the sugar industry to give all of industry a say in its activities through both grower and miller-owned shares, now sugar millers Wilmar and MSF dominate the shareholdings, and between them were able to select all four industry directors plus the independent directors and executive board.
Diversification distraction
STL has tried to link removing QSL with an increase in revenue diversification. However, QSL already has a track record of progressing a range of non-sugar projects to increase terminal revenue, such as the wood pellet loading in Bundaberg and fertiliser storage in Mackay. However, QSL has a clear mandate to prioritise what’s best for the Queensland sugar industry, whereas STL has no such constraints when seeking to increase its revenue base.
What you can do
This united industry group will fight hard to do all we can to overturn STL’s decision. However,
growers must also speak up to share their concerns. You can let the STL Board know what you think by contacting them via email at info@sugarterminals.com.au or by post to GPO Box 1675, Brisbane QLD 4001.
If you are an STL G-Class shareholder, you may want to consider joining the others who have
recently given their proxy to QSL. This proxy arrangement temporarily transfers your voting rights to QSL, expanding their voice in STL elections and supporting their to fight to reverse STL’s ridiculous decision.
Your voice counts – please make it heard on this important issue.
