A MULTI-million dollar livestock feed pelletising plant has just added another tier of diversity to MSM Milling's canola crushing business - a joint venture with the Manildra Group.
Started as an on-farm diversification move by Cudal farmers Bob and Peter MacSmith in 1992, the oilseed business has been a 50-50 partnership with the Honan family company since the MacSmiths seriously upgraded their crushing operations and relocated to a two-hectare site in the Manildra township in 2007.
MSM's refined canola oil now sells to export markets and a host of domestic buyers ranging from the KFC and Pizza Hut parent company Yum! Brands, to food processor Simplot and food service providers.
The brothers' processing enterprise has grown to now employ about 60 staff at its Manildra site, including workers at an adjoining vegetable oil packing plant which even makes its own 20-litre drums in which some product is supplied to customers.
"We're now producing roughly as much oil every day as we did in our first year," said Peter MacSmith.
Canola meal, a by-product of the crushing operation, has traditionally been sold in bulk to dairy, beef and poultry producers as a high protein feed supplement, but is now also key ingredient for the new stockfeed mill.
Production of the new pelletised stockfeed began ramping up in August.
Another similar pelletised feed mill, expected to produce about 300,000t a year, is expected to be completed by Manildra at its Nowra district starch and ethanol plant next year.
Sold in bulk, the value-added feed line combines canola meal with mill mix (bran and pollard) from the nearby Manildra flour mill, condensed distillers syrup (a high energy, high protein syrup by-product of the ethanol fermentation process) from the Nowra plant, barley and other mineral ingredients.
MSM already has established stockfeed export markets in New Zealand and parts of Asia which are expected to be significantly enhanced by its new product offering.
Domestic buyers range from dairies to prime lamb finishers.
"We've been developing the new lines for some time, largely targeting the potential export opportunities opening up," Mr MacSmith said.
The MacSmiths, who still run mixed farming operations on "Little Boree" and "Burramogong" at Cudal, originally branched out into canola processing because markets for their grain crops were being hammered by a northern hemisphere glut and depressed global prices in the early 1990s.
Lacklustre domestic trading opportunities, exacerbated by a recession and high interest rates, squeezed post-harvest wheat prices to lows around $90 a tonne.
With canola crops being rapidly introduced into farming rotations in Central West NSW the brothers took a punt and established a cold press canola crushing plant, much of it built by themselves with help from local contractors.
While the boutique-sized venture developed a solid customer base for its crude oil output, Mr MacSmith said it eventually became clear that in order to supply food manufacturers and other oil buyers with the more significant volumes they needed the operation had to grow more high-tech.
The current double expeller oilseed press produces a fully refined vegetable oil product sold in bulk, boxed bladder and drum consignments.
MSM has not only become a significant canola buyer in the region, but with its new stockfeed line it is also now an end user buyer for barley.
Mr MacSmith said while MSM was an independent trading entity, the advantages flowing from having Manildra as a key investor were numerous, particularly when it came to opening doors to trading opportunities.
"Our business obviously has to stand on its own two feet, but you can't under-estimate the value of the Manildra brand in Australia and overseas and how helpful it has been for our growth."