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also has a flow on effect to the spatial economics <strong>of</strong> sugarcane transport to the mill. Spatial<br />
economics <strong>of</strong> sugarcane transport are driven by the efficiency <strong>of</strong> transport (i.e. shorter hauls are more<br />
efficient) and the critical mass required to sustain operations.<br />
Sugarcane transported from the edges <strong>of</strong> sugarcane growing areas need to contribute at least enough<br />
revenue to cover the transport and milling costs. Cane transport distance largely determines the real<br />
cost <strong>of</strong> transport which doesn’t vary with sugar price therefore fringe areas can negatively impact on a<br />
milling region as sugar prices decline. This is a particularly important consideration where the mill is<br />
sourcing additional tonnage at the limit <strong>of</strong> economic transport distances. From the millers perspective<br />
this may be justified to underpin existing milling operations and utilisation <strong>of</strong> assets.<br />
Numerous studies have been conducted in harvest and transport logistical studies however<br />
implementation <strong>of</strong> recommendations from this work has been limited. Given pressures on the industry<br />
to diversify and become less dependent on raw sugar production it is likely that this will lead to<br />
increased costs per unit <strong>of</strong> cane for the transport sector. Low margins require a high volume <strong>of</strong><br />
production to achieve efficient use <strong>of</strong> capital and diversification which leads to less volume <strong>of</strong> product<br />
and may in fact lead to greater uncertainty across the value chain.<br />
5.3.4 Milling<br />
Within the Australian Sugarcane Industry there are 24 Mills (21 in Qld; 3 in NSW). On average (i.e.<br />
industry statistics 2006 to 2010) the milling sector crushes 32 million tonnes <strong>of</strong> sugarcane and<br />
produces 4.4 million tonnes <strong>of</strong> raw sugar each year. The majority <strong>of</strong> mills are dated in terms <strong>of</strong> basic<br />
structures and production facilities. The oldest mill operating commenced in 1874 while the majority<br />
<strong>of</strong> currently operating mills commenced operation between 1875 and 1925. The most recent mill is<br />
the Tablelands Mill, which was built in 1998 and was the first new mill in <strong>Queensland</strong> since 1925.<br />
Mill throughput ranges from 3.3 Mt (Victoria Mill) to 433,000 Tonnes (Rocky Point). Australian<br />
mills produce bulk raw sugar except for the Tablelands mill which produces syrup that is<br />
manufactured into raw sugar at other mills. In addition refineries are located at Racecourse, Millaquin<br />
and Harwood mills with another major refinery located in Melbourne. The production <strong>of</strong> refined<br />
sugar is to a large extent is considered a separate part <strong>of</strong> the sugar industry. Apart from crushing<br />
sugarcane and producing raw sugar, the milling sector also coordinates harvesting and transport<br />
arrangements which are in effect an extension to the front end <strong>of</strong> the mill. Harvesting and transport is<br />
coordinated to match the crushing rate <strong>of</strong> the mill.<br />
Except for two mills, sugarcane is crushed 24 hours a day, 7 days a week for a period <strong>of</strong> 22 – 24<br />
weeks (June – November). Continuous crushing proves a better utilisation <strong>of</strong> harvesting, transport<br />
and milling capital. Updating <strong>of</strong> operating equipment within these mills has been in response to cane<br />
land expansion and necessary maintenance or replacement. Other areas <strong>of</strong> significant investment<br />
include automation and technical enhancement <strong>of</strong> existing processing equipment. In recent times<br />
cogeneration <strong>of</strong> electricity has been used to finance replacement <strong>of</strong> boilers and improvement in<br />
thermal efficiency. The return on these investments is a result <strong>of</strong> renewable energy initiatives which<br />
cross subsidise the raw sugar value chain.<br />
The development <strong>of</strong> the Tableland Mill by Bundaberg Sugar Ltd was novel at the time. In simple<br />
terms the feasibility process was based on working out how much cane could be grown in the area<br />
(based on suitable land, yield, economics etc), then transport costs were examined to see how much<br />
cane could be sourced within an economic supply area. Based on this information, building the mill<br />
(i.e. most costs are fixed) was dependant on achieving particular economic criteria / scale (per comm.<br />
M. Smith). Once built the harvest and transport system for the mill was owned and operated by<br />
Bundaberg Sugar Ltd and based on a just in time delivery system. The Tableland Mill has recently<br />
changed ownership and is now under the control <strong>of</strong> MSF Sugar.<br />
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