GROWERS will need to contribute $1.2 million for the proposed new storage and handling facility at Tailem Bend to go ahead as a grower cooperative- type venture, rather than a private enterprise.
Details of the project were outlined at a meeting in the town on Monday night, attended by about 100 growers and industry representatives from Cargill, CBH Grain, Toepfer and Emerald.
A survey document distributed to growers requested them to indicate how much money they were prepared to commit, in increments of $5000 up to $20,000.
It also outlined costings for the project $5.78m project. This includes the development and installation of 100,000 tonnes of bunker storage, two 400t-an-hour stackers, a sampling shed, two weighbridges, earthworks for the bunkers, an upgrade to Racecourse Road, including bitumenisation and roadworks.
Clandene Pty Ltd will establish 10 steel vertical grain storages with 2000t capacity and a shed, at a further cost of $5m.
Eastern Grain chairman Leighton Huxtable said the group needed quick feedback and a financial commitment from growers interested in taking a cooperative approach.
"The project is going ahead in one shape or another, whether it's a private consortium or grower cooperative," he said.
Mr Huxtable said the project would add much-needed competition in the storage and handling sector and added competition in freight-to-port.
"The Viterra site at Tailem Bend is an export-only site so those growers warehousing grain there can't access the lucrative domestic market," he said.
"With this new facility, growers have the opportunity to tap into the domestic market.
"Also, if growers have their own site, they have the opportunity to blend grain and gain the benefits from that blending."
Mr Huxtable said growers delivering to the site would also be able to access global containerised markets through the group's affiliation with Semaphore Containers.
Clandene director Kevin O'Driscoll said the project would benefit growers in a number of ways. The company had bought the Tailem Bend site where its storage and handling facility would be located.
"This is an opportunity to participate in the supply chain and to have some ability to influence cost structures," he said.
Mr O'Driscoll said the main aim was to have the facility up and running in time for the 2012 harvest.
"We'll be doing all we can to be open by November 1," he said.
Accountant Des Caulfield - who has been working with Eastern Grain - said growers needed to consider whether they saw the project as a reasonable investment.
"Growers have got to get a return on the money they put in," he said.
"That can come in two ways - a share of the profits in the form of dividends or a return through bringing storage and handling competition to the area."
Mr Caulfield suggested an unlisted public company be set up to own and run the site, in which growers could have shares, similar to the FREE Eyre model.
He said time was of the essence in moving the project forward.
"A decision on whether this is going to go ahead needs to be made within the next four to six weeks," he said.
"It is likely to take four to six months to get a prospectus out, distribute it to everyone, give them time to consider it, fill out the application and put their money in."
*Full report in Stock Journal, February 23 issue, 2012.
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