Sucrogen's vision splendid for Proserpine mill

The 2012 crushing is going to be one of the best in the industry for many years.

This bright forecast comes from the Executive General Manager of Sucrogen Cane Products Craig Doyle who is this week reiterating his company’s pledge to boost cane supply to the Proserpine Mill to over 2 million tonnes within three years.

"The weather is good, the price is good and the crops around Proserpine are looking fantastic," says Mr Doyle who confirms the four massive parcels of land pulled from auction at the eleventh hour before Christmas are most certainly on Sucrogen’s wish list.

"We are still discussing the finer details of the contract so I cannot say too much now. But all going well we hope to have secured the properties within two months. Sucrogen remains committed to finding ways of working with growers to boost productivity at the mill. So whether we get farmers in the area to lease the ground or whether Sucrogen manages them, we’re not certain. It’s still really early days," he said.

The 400 hectares of potential cane land at Gibson Creek – a block of land purchased by the mill some five years ago – is also at the centre of Sucrogen’s vision.

"The board had a plan to increase the yield from what they grew last season which was about 17,000 to 50,000 on this block. This was their vision! There just wasn’t the money there to back it up. But Sucrogen sees no reason why we can’t continue this plan."

Mr Doyle says while the relationship between grower and miller was never smooth sailing, he was hoping for a top future with great working relationships.

"We are nothing without the growers, and the growers would be stuck without a good, working mill. I can’t work miracles and I can’t promise it will be 100 percent complete before the beginning of the crush but I will do my absolute best to get the mill up to scratch and make sure the bins are on the line when it comes time to cut."

Sucrogen offers more money for Proserpine Mill

 Just days away from the members’ vote Sucrogen has announced an extra A$5 million, which will effectively increase net proceeds from the proposed sale of the Proserpine mill.

 “We are providing this extra A$5 million in net sale proceeds to ensure

members receive a greater financial return from the sale - now estimated at

A$38 million,” said Sucrogen CEO Ian Glasson.

 The extra $5million does not actually increase Sucrogen’s headline price but the company’s executive general manager for strategy and business development Shane Rutherford said headline price was not something members should be focussing on.

 “In fact you can actually have a higher headline offer which returns less to members in the end,” Mr Rutherford said.

 “What we’ve been able to do is come up with a way we can guarantee a $5million increase in net proceeds to members, but we are not prepared to disclose how we have done that at this point,” he said.

 “This is a genuine gesture to provide additional funds for members. It’s an absolute commitment. We’ve amended our arrangement with Proserpine. This is riskless, it’s in writing and it’s executed.”

 Proserpine’s members have until 5pm on Thursday to vote on Sucrogen’s offer to buy the mill. Should the offer be accepted, Sucrogen supports the Proserpine board in making an advance payment of up to A$15 million to members before Christmas

2011.

 “Members have told us they strongly support an advance payment of sale proceeds and we’re happy to sit down with the board to work through the process to see if we can make that happen,” Mr Glasson said.

Proserpine cane farmer honours cane cutting tradition

Proserpine cane farmer Lindsay Altmann took his family to the Burdekin on Sunday to participate in a landmark competition that pays tribute to the strong men of yesteryear.

Just days out from the finish of the crush and in the midst of an extremely turbulent time for Proserpine growers, the Altmanns made the effort to travel the 170km north to the Australian cane cutting invitational event to field a strong side for Proserpine - with members from their family alone.

Before mechanical harvesting was introduced, teams of men used to go from cane farm to cane farm cutting the burned cane by hand and it is to pay tribute to this back-breaking line of work that this competition was introduced.

One such man who was skilled in this toilsome craft was Lindsay’s father Eric whom his son says was a “gun cutter”.

“The harvester started on our farm in 1969, so before that my old man used to contract cut plant. So right from when I was old enough - 10, 11 years old - I used to go plant cutting with him. I just used to follow behind and cut the last drill … you learn without really knowing you are learning,” Lindsay said.

Altmann senior was also no stranger to the competitor’s circle, winning four or five Australian championships in a row during the late 60s.

“But just like me, my old man didn’t do it for the glory of winning. He did it because he was proud and loved what he did,” he said.

Lindsay and his wife Denise took their three sons Callum, Joel and Karl to the event in the hope the tradition would continue.

“What I worry about is I am 50 ... so where are we going to be in 10 years time when there is no one still capable of cutting who actually did it for a living!

“Once that happens – the competition dies, and I’d love to pass this tradition on to my kids, just like my old man did for me,” he said.

The Australian cane cutting invitational event was held in conjunction with the Home Hill Harvest Festival.

    Attracting around 100 people, it was the first year it had been held in town, usually taking place in a rural landscape on the farm some 80km west of Ayr at a place called 
Dalbeg.

Sucrogen warns Proserpine it's 'now or never'

 It’s “now or never” for Proserpine’s cane farmers according to Sucrogen CEO Ian Glasson, who says his company will not come back if the vote goes down on October 27.

 “We stayed in this process the first time because it was such a close vote, but a second “no” vote gives us a very clear message we’re not wanted. Our offer expires in October at the end of the (second) vote,” Mr Glasson said.

 Mr Glasson, who arrived in Proserpine on Sunday, said growers who focussed on a potential bidding war were playing a “dangerous game”.

 “It’s a bit like playing Russian roulette. They (the members) pulled an empty chamber because we happened to come back, but we’re not going to do that again. Quite simply a bird in the hand is worth an extra $2.8million in the bush,” he said.

 Mr Glasson has spent much of the past three days talking with growers, mill employees and members of the community, taking questions on topics such as the no-shop clause, asset sale agreement, warranties, and how Sucrogen came up with the magic “$115million” bid.

 Mr Glasson reiterated that $115million was a “fair and reasonable” price for a mill that requires a lot of work.

 “I’m sorry. I can’t put another $5million on the table. We’re business people. There isn’t more money to come. We understand mills. We’ve got to get a return on our investment. Beyond that we don’t make money,” he said, reminding members that after the crush the mill “starts to bleed $3million a month”.

 On the matter of denying access to other bidders, Mr Glasson said there was “absolutely a fair chance”.

 “We got rid of it (the no-shop clause). We stood aside and allowed Proserpine’s board to engage with Cofco. I understand Cofco looked at some 1,300 documents, which is more than us. I haven’t seen any of the Cofco offers but the advice from the independent experts is they still have not put a binding offer on the table.

 “The board are obliged to consider a binding offer. There isn’t one. If there’s a better offer you’re free to take it but the offer here is ours,” he said.

 “It’s very clear that if Cofco want to buy the business they need to make a firm, binding offer like ours,” he said.

 And finally, Mr Glasson said, “I don’t want to be party to something that’s destroying the community”.

 “I genuinely believe there is 75 per cent of people who can see the benefits of this so it would be very disappointing to see the vote go down

 “We want to buy it (the mill). We’re serious. Either say yes, or put us all out of our misery and good luck!”

Tully Sugar talks takeovers

 Tully Sugar’s chairman Dick Camilleri and CEO John King, joined Deputy Chairman John Amies on the ground in Proserpine last week. The three executives conducted further meetings with growers and the local community, citing comparisons with Cofco’s takeover of Tully in many of the conversations that occurred.

 “I think it’s fair to say Tully’s had a bit of experience with takeovers given the fact we’ve just been acquired by Cofco and that process was open and transparent,” Mr King said.

 “There were three bidders and the board and management negotiated with all of them and as a result of that the shareholders ultimately got a better result.

 “Ultimately the growers here will make their decision. We just think an open and transparent process would be in the best interests of all,” he said.

 Tully’s three executives had already left town by the time Sucrogen’s Ian Glasson arrived and an opportunity presented itself for a “round table” scenario at a shed meeting on Monday night.

 While Mr Glasson said publicly that he would be happy for Tully Sugar to attend, Tully’s executives said they would prefer to be contacted direct.

 “We don’t believe it is appropriate for us to attend Sucrogen’s grower meetings without a formal invitation from the company,” Mr King said.

 “We would very much support a joint forum, whereby Tully and Sucrogen present their offers to growers to give Proserpine members full visibility of what each bidder is proposing.

 "A Tully/COFCO representative has left messages on Mr Glasson's mobile and his office phone in Sydney and I have written to him to formally invite Sucrogen to jointly host a forum with us for growers in Proserpine at a mutually convenient time.

 “We look forward to Mr Glasson's response and to continuing to engage Proserpine growers through a joint forum in the very near future,” Mr King said.

 “Tully/COFCO is committed to securing the best offer for Proserpine’s members and supports a full, open, honest and transparent process - a joint forum is a good step in this regard," he said.

Proserpine's second Sucrogen vote draws near

 Proserpine’s co-operative sugar mill may be one step closer to being sold. A spokesperson for PCSMA confirmed the notice of meeting (for a second Sucrogen vote) has now been lodged with the registrar and the distribution of paperwork to members is expected to occur within a matter of days.

 Sucrogen’s CEO Ian Glasson will be visiting Proserpine next week, meeting with mill employees and local business owners as well as holding informal face-to-face sessions for PCSMA members at the Proserpine RSL. The sessions will be held from 9am to 11am and again from 2 to 4pm on Monday October 10, giving members the chance to ask any questions they might have about Sucrogen’s offer to buy the Proserpine mill.

 “People don’t need an appointment. They can just walk in off the street. Our offer will give Proserpine members the best outcome, so we’re keen to ensure they have all the facts,” Mr Glasson said.

 PCSMA’s electrical engineering manager Steve Ischenko, who previously worked for Sucrogen (then CSR Sugar), said there would be huge benefits to becoming part of a larger company.

 Mr Ischenko said while it was not his place to dictate how PCSMA members should vote, he thought it was good news when Sucrogen announced its interest in the mill.

 “I thought - this is great. This is just what we need,” he said.

 Mr Ischenko said whatever decision members made, the sooner they did it, the better.

 “It’s important it’s finalised before the maintenance season starts. Once the crushing’s over, we starting dipping into the profits,” he said.

No offer from Mackay Sugar for Proserpine Mill

Proserpine Sugar’s chairman of the board Lou Raiteri says claims made by Mackay Sugar regarding the mill sale process are misleading.

Yesterday afternoon Sucrogen officials came to town to meet with growers at the entertainment centre. There will be another meeting this morning.

“As part of the process to find an equity investor,. our advisers approached a number of parties including Mackay Sugar to gauge their interest in investing in Proserpine Mill.

“Mackay Sugar has never made an offer for Proserpine Mill for the board members to present to our members.

“Mackay Sugar is currently engaged in a high profile and highly competitive bidding war for Tully Sugar with no certainty it will be successful. Mackay sugar’s argument for an all-Australian sugar milling group is highly reliant on them making a successful bid for Tully Sugar.

Mr Raiteri says by comparison, Wilmar International has made a firm cash offer of $115m for Proserpine Mill.

“After a rigorous review process, the board believes the offer from Wilmar would provide members with greater certainty and a range of benefits,” he said.

Sucrogen’s CEO Ian Glasson told growers yesterday this sale was far bigger than just the purchase of the mill.

“We will build a strong industry for future generations. It doesn’t stop with the purchase of the mill,” Mr Glasson said.