Manildra Group buys 300,000t of grain storage space in NSW

Manildra Group buys GrainCorp, Cargill storage sites in NSW

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Manildra Group's newly-acquired Stockinbingal grain bunker site.

Manildra Group's newly-acquired Stockinbingal grain bunker site.

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After running out of milling grain supplies in the drought, Manildra Group is strategically expanding its bulk storage space

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In the lead up to this year's promising winter grain harvest, Australia's biggest domestic wheat buyer, Manildra Group, has made a strategic play for extra storage space, acquiring bulk receival sites from Cargill and GrainCorp.

The flour miller has bought three sites - the GrainFlow bunker storages at Stockinbingal and Bellata and GrainCorp's silo and bunker storage facility near the massive mill in the heart of the Central West township after which the company is named.

Manildra, which had to import wheat when domestic crop supplies ran short last year, also owns another North West NSW storage depot at Moree.

Cargill confirmed the sale of its sites was initiated a few months ago and fitted with a strategic review of the company's storage needs based on its long term strategy and customer demand.

This gives us extra capacity to fall back to, and have access to 365 days a year - Peter Sloan, Manildra Group

The 110,000-tonne capacity Stockinbingal site in south western NSW and 120,000t Bellata facility in the North West were built in 2002 by the newly privatised grain marketer AWB Limited as it launched a network of super-sized depots to rival GrainCorp and ABB in the grain accumulation game.

At the time the former grower-owned Australian Wheat Board had only just become a publicly listed entity, opening the first of what was to become 20 GrainFlow rapid intake sites at Dimboola in western Victoria in 1999.

Cargill later bought the AWB commodity business in 2011.

A Cargill spokesman said the company had no plans to sell any of its other GrainFlow sites in NSW, Victoria, Queensland and South Australia.

It was also continuing a strong commercial relationship with Honan family's Manildra Group.

Up-country capacity

While the new acquisitions will be primarily used for wheat, the 70,000t capacity GrainCorp storage in the town of Manildra will also store canola for the nearby MSM Milling oilseed processing business, part owned by Manildra Group.

Company grain buyer Peter Sloan said the group would continue buying and storing grain during harvest at other sites owned by the major bulk handlers.

However, the three new acquisitions gave the company more up-country capacity to help co-ordinate supplies to its plants at Narrandera and Nowra in southern NSW, Gunnedah in the North West, and Manildra.

"We're not going to store all our requirements, but this gives us extra capacity to fall back to, and have access to 365 days a year," he said.

Peter Sloan

Peter Sloan

"It's a natural fit with our strategy of having a close relationship with growers in the heart of the wheatbelt.

"It also means we don't have to build more capacity at the flour mills themselves and can deliver high-quality wheat from our storage sites daily."

Rail opportunities

The strategic location of its grainbelt receival depots would enable greater use of bulk rail movements to Manildra's mills and reduce reliance on grain trucks travelling through regional towns.

One rail consignment equated to about 70 B-double loads of grain on rural roads.

Mr Sloan said Stockinbingal in particular would be helpful in extending storage backup for the big Nowra starch and gluten plant, the largest of its type in the world.

Storage capacity at Nowra is limited to about 12,000t, and options for significant extra silo construction at the South Coast site were less attractive.

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Meanwhile, storage space at Stockinbingal would also enable Manildra to become more active in the southern NSW grain market, including offering more forward contracts to growers prior to harvest.

Each site would employ two full time staff providing price and quality information, and up to 40 workers during the harvest peak.

Regional footprint

"These acquisitions cement Manildra's footprint in regional NSW and the company's commitment to a sustainable grains industry," Mr Sloan said.

Manildra Group's food products and industrial flour business grew from Jack Honan's purchase of the tiny Manildra mill in 1952, which has since grown into Australia's biggest milling complex.

The company also has a three-mill sugar refining and processing partnership on the NSW North Coast, a flour packing and bakery mixing plant in Melbourne and two bakery and industrial products sites in the US.

It is reputedly the second largest exporter of value-added food and industrial products through Sydney's Port Botany container terminal.

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