Australian Cane Farms is preparing to undergo major expansion at its Burdekin Valley sugar growing operations after a $20 million investment from Queensland Sugar Ltd.
It follows a recent rights issue and placement of $35 million by ACF, with the new funds to continue its acquisition program in the Burdekin after signing contracts for a further 2100ha of farms.
Upon completion of these acquisitions, ACF will own 4500ha, making it one of the biggest independent sugar producers, by volume, in Australia.
QSL will hold a 20 per cent stake in ACF as part of a wider program of QSL projects designed to promote the Queensland sugar industry's long-term viability by supporting sugar production at the grass-roots level.
"We are delighted to welcome QSL to our share register and view this new partnership as a very positive move for the industry as a whole," ACF chief executive Steve Kirby said.
"ACF's strategy is to aggregate well located cane farms in the Burdekin, improving productivity levels and unlocking economies of scale.
"This investment enables us to continue that process and signals our commitment to the Burdekin, which we believe offers some of the best potential in the world for high quality, low cost sugar production."
It's the first time QSL has made an investment in sugar production at a farm gate level.
"QSL is always looking at ways that we can add further value for our members and the loss of cane-farming land to other industries is one of the biggest threats to the Queensland sugar industry's long-term viability," QSL chief executive Greg Beashel said.
"Our new partnership with Australian Cane Farms aims to not only help protect and maximise production from existing cane land, but eventually expand the land under cane.
"It also potentially provides an option for farmers who would like to exit the industry while also keeping their valuable land in production and jobs in cane."
Mr Beashel said that, like its investment in Sugar Terminals Limited, QSL's ACF investment would be debt funded, with net profits passed back to its members.
ACF has grown over the last 16 years to own and operate 2250 hectares of cane farms in the Burdekin.
"Australian sugar is already very competitive in the world export market and the industry is well placed to capitalise on growing global consumption levels, but innovation is key," Mr Kirby said.
"The biggest challenge for the sugar industry as a whole is one that faces the broader agricultural sector, and that is how to attract new sources of capital investment as older farmers seek to exit the land," he said.
Want news highlights delivered to your inbox? Sign up to the North Queensland Register newsletter below.
