Sugar mills closer to sale
THE NSW Sugar Milling Co-operative yesterday confirmed it was in talks to sell its two $200 million co-generation plants.
Chief executive Chris Connors said yesterday the co-op was negotiating with six parties after receiving interest from about 300.
He declined to name which companies were now involved in the negotiations.
Mr Conners said the sale was being forced on the co-op by the combination of lack of fuel caused by frosts and the Federal Government's Solar Rebate Scheme, that put a hole in its business plan.
“We would prefer to retain ownership, but there has been a significant reduction (in revenue) in the short-term caused by the Government's solar credit scheme,” he said.
The two plants have lost $8 million over the last two years after the price paid for renewable energy credits halved when the market was flooded following the introduction of the Solar Rebate Scheme.
While there is no timetable for any sale of the Broadwater and Condong co-generation plants, Mr Connors said it would definitely go ahead if the Government didn't change its rebate scheme within the next three months.
“We would like the Government to change the renewable energy legislation so the amount of surplus RECS (renewable energy certificates) generated can't be carried forward over the next couple of years,” Mr Connors said.
“This would bring stability back to the market.”
The NSW Sugar MillingCo-operative has a market share of about 4.5 per cent of Australia's $2.5 billion dollar sugar industry. The co-operative generated revenue of $88 million last year.
It was set up in 1978 by about 600 canegrowers who bought the three NSW mills from CSR.
It also holds a 50pc stake in Manildra Harwood Sugars, which owns and operates the only sugar refinery in NSW.
In 2008, the co-op, in partnership with Delta Electricity, commissioned two cogeneration power plants at Broadwater and Condong to generate renewable electricity by using bagasse, a material left over after sugar cane stalks are crushed.