Co-op selling assets to pay cane farmers

THE NSW Sugar Milling Co-operative, which owns the Harwood Sugar Mill, has begun selling off assets to cover cost overruns of its electricity co-generation project and to make the final payment to farmers for their 2008 crops.

Last week, four properties in Harwood - three houses and a vacant block in River Street - were advertised for auction on November 14.

Selling agents Ray White Real Estate Alstonville said other mill properties at Condong and Broadwater would go under the hammer soon.

Clarence Valley Cane Growers Association president Vince Castle said the sale of assets was a response to the problems with the electricity co-generation plants at Condong and Broadwater mills.

He said the cost overruns from this project had led to the co-op delaying final payments for farmers for their 2008 crops.

“It looks like that last payment will not come until February,” he said.

“I can't remember a final payment to farmers any later than early in November.”

Mr Castle said the news was not all gloom for sugar farmers.

“They've received two delivery payments and there's been an upgrade in the price already because of higher sugar prices. That's all good,” Mr Castle said.

“While it's not good that farmers have not been paid for their 2008 crops, farmers understand the problem.”

Mr Castle said the challenge to the co-generation plants in the Land and Environment Court had been costly and technical problems in using sugar cane waste to produce electricity had tied up available funds.

The commissioning of the $220 million co-generation plants in November last year was supposed to end cane fires as the vegetation could be burnt to produce electricity.

Mr Castle said there had been problems extracting sugar from unburnt cane as well as sourcing alternative fuel during the lag time from June to September.

He said the co-op's move to sell-off assets had coincided with the arrival of a new CEO, Chris Connors, in August last year.

“They've been drawing up a list of assets and are looking at using them in a different way,” Mr Castle said.

“The days of having large numbers of mill houses are over.”

Mr Castle was confident the co-generation project will be a success in the long term.

“Unfortunately in the short term it has caused us some problems,” he said.

Ray White Real Estate spokesperson Warren Perkins said his company had been commissioned to sell the mill houses and vacant blocks at all three sites.

He said the plan was to release the properties onto the market in stages.