GrainCorp unclear on SA oilseed plant’s future

GrainCorp to shut SA oilseed plant


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GrainCorp's the newly upgraded oilseed plant at Numurkah in northern Victoria is at least three hours driving distance closer to its main markets in Melbourne and NSW than the Millicent facility.

GrainCorp's the newly upgraded oilseed plant at Numurkah in northern Victoria is at least three hours driving distance closer to its main markets in Melbourne and NSW than the Millicent facility.

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A future use for GrainCorp’s South Australian oilseed crushing site at Millicent is still undecided in the wake of a decision to shut the plant in late September.

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A FUTURE use for GrainCorp’s South Australian oilseed crushing site at Millicent is still undecided in the wake of a decision to shut the plant in late September.

The smallest of the GrainCorp Oils canola crushing sites, the 100 tonne a day Riverland Oilseeds facility in south-eastern SA is no longer considered to be in a cost effective location in relation to its main markets.

Hot on the heels of the closure of its Brisbane oil refining and packing plant and a $130 million upgrade to crushing and processing operations in Victoria, GrainCorp has opted to continue “streamlining” its oils business.

General manager of supply chain and operations, Doug Belavic, said no decision had been made on what would happen to the site at the end of 2016 when the plant was decommissioned and cleaned up.

Options could range from using it as a grain storage facility to selling it off.

Mr Belavic said the decision to close and terminate 13 jobs in the town of 5000 was difficult.

“We have conducted an extensive review of all the strategic options for our operations, he said.

“There are particular challenges and inefficiencies with the location of the plant, being some distance from our customers, as well as its small scale.”

He said the newly upgraded plant at Numurkah in northern Victoria was at least three hours driving distance closer to the main markets for oil and oil products in Melbourne and NSW.

Numurkah’s crushing capacity is seven times greater than Millicent.

The closure decision had not been hastened by the prospect of a potentially smaller eastern Australia canola crop this year or the current tight crop market outlook.

GrainCorp was building another 25 per cent capacity into its Numurkah site, having already upgraded its refining capabilities.

It also recently increased crushing capacity at its West Australian oilseed crushing site at Pinjarra to 200t a day.

In Melbourne, at West Footscray, the company is now cranking up new vegetable oil refining, packing and bottling lines for spreads, oils and dressings.  

“While we are investing to grow our edible oils processing capability in Australia, we are also seeking to maximise our efficiency to keep Australian oils and meals competitive,” Mr Belavic said.

The Millicent, Pinjarra and Numurkah plants were acquired by GrainCorp from private vegetable oil crusher and storage company Gardner Smith for $372 million in 2012 as part of a bigger $472m deal also incorporating the purchase of Integro Foods bought from Goodman Fielder.

The SA plant was initially commissioned in 1991 by local investors, then bought by Gardner Smith about 10 years later.

“We are taking a range of actions to minimise the impact this decision has on our team, providing outplacement services as well as exploring all redeployment opportunities within our network,” Mr Belavic said.

The extended notice of the closure was intended to help give staff time to consider their options.

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