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that cane production is the most
profitable crop to maximise supply.
3. Millers generally have “ownership” of
cane transport via rail supply networks
or contracted road transport.
4. Cane transport generally consists of
single or limited number of operators ie
one transport contract
5. Growers have ownership of
harvesting operations via owner
operator or contractor. Across industry
this is over capitalised
6. Harvesting operations are controlled
by the miller to maintain adequate
supply ie limited storage potential
7. Harvesting and transport is dictated
by cut to crush delay.
8. Costs for harvesting and transport
are generally socialised i.e. no difference
between farmers. The miller covers the
cost of rail transport. A flat rate is
charged per tonne.
9. Milling is highly sensitive to local
cane supply.
10. The sugar industry developed from a
very regulated industry.
11. Sugar industry is largely based
around raw sugar production with
recent efforts into whole cane
harvesting for co-generation being
unsuccessful.
engagement
3. There is an expectation that harvesting
and transport will be driven by third
parties i.e. broker Mallee supply
4. Power generation companies do not
have agricultural context. They do not
want to have to deal with multiple farmer
suppliers.
5. Industry based on large number of
small resource owners will be complex to
manage.
6. Mallee industry transport will be most
likely road based. Possibly an existing
prime mover contractor with specialised
trailers, or transport and harvesting could
be jointly owned, as is common in forestry
systems.
7. Harvesting operations unlikely to be
individual grower owned. If owned by
processor or independent contractor best
interests of farm production systems are
not always met unless payment and
penalty systems apply. Grower
cooperative systems may provide better
model.
8. Harvested Mallee may have greater
storage periods and harvesting and
processing may not be as sensitive as
sugar to cut to process delays.
9. Traditional grain based and wood chip
transport systems are costed on haulage
distance and it is likely that mallee will be
the same.
10. Limited understanding of seasonal
production and source of supply.
11. Mallee is more likely to have multiple
product streams.
2. Harvesting / Transport responsibilities
need to be clarified in mallee.
3. Potentially multiple transport players
depending on who takes responsibility ie
grower vs energy company
4. Opportunity to implement optimised
supply chain arrangements as opposed to
optimising existing structures
5. Harvest scheduling may not be as critical
for mallee since harvest to process delays
will not compromise quality as much as in
sugar and short term stockpiling is possible.
6. May be able to store the material longer
before processing. Can’t store the whole-tree
biomass for more than 4-5 days due to risk
of spontaneous combustion.
7. Harvesting and transport costs will be at
growers expense, either directly (contractor
is engaged by the farmers), or indirectly (the
biomass value is determined primarily by
the biomass processor, who engages the
harvest and transport contractor, and
farmers are paid the remainder as stumpage
for the standing mallee).
8. Energy companies don’t appear to be as
engaged with crop production in mallee as
sugar millers are in cane.
9. Potentially multiple product streams
from Mallee, leading to conflicting handling
requirements.
3. There is a catch 22 with farmers unlikely to
plant mallee without a commercial incentive
and processors unlikely to invest without a
secure supply.
4. Need for an intermediate entity to occupy
space between grower and processor and
make a business of a profitable supply chain.
Neither the grower nor the processor has a
real interest in the supply chain.
5. Processor is unlikely to purchase mallee
production land or lease mallee strips due to
focused business interests and complicated
business arrangements.
6. Consideration needs to be given to the need
for a growers’ commercial representative,
similar to the role of the former Oil Mallee
Company.
7. Streamlining harvest and transport costs
will require coordination at processing end.
8. Single operator for harvesting and
transport most likely.
9. The scale of the operation would initially be
very small, a couple of harvesters. This
increases the risk of supply breaks.
10. Seasonal Mallee supply will need to be
accurately determined to manage harvesting
and processing although daily scheduling may
not be as sensitive as sugar.
11. Clarity of likely product streams and
implications for cut to processing delay.
12. Industry development will be driven by
who values the product most.
13. Energy companies will need to take an
interest in farm based production issues, even
though they are unlikely to be interested in
trading in biomass.
14. Needs to be a large scale resource to build
the business around into which small scale
mallee producers can feed material.
15. Long term contracts may be required to
guarantee supply and attract farmers to grow
the biomass.
16. Need to understand different criteria for
raw material handling depending on use.
17. Payment systems and business structures
vary in sugar cane and provide a range of
models from which a new mallee industry will
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