Category: KCGO News

The latest news from Kalamia Cane Growers and Kalagro for Members Only.

Member Notice – A Message to Growers – Wilmar Proposal

Kalagro

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Dear Kalamia Members,
Please find below a message from Greg Beashel QSL CEO regarding Wilmar’s proposal.

A message to Growers – Wilmar proposal

Dear Grower,

In response to Wilmar’s communication today to growers regarding the current OSA negotiations with Wilmar, we whole-heartedly agree that it is unusual to hold negotiations via the media. That is why we were surprised that Wilmar decided to do just that last Friday without informing QSL of its apparent intention to cease negotiations. Once that had occurred, QSL considered it was important to clarify the misinformation published by Wilmar and will continue to do so given what is at stake for the Queensland sugar industry.

While QSL welcomes Wilmar’s partial disclosure today regarding their current OSA proposal, there are other unreasonable terms contained within Wilmar’s current proposal which they continue to not disclose to their growers. Unfortunately Wilmar has still not advised us directly that negotiations have ceased, nor have we called for negotiations to end, and so QSL continues to regard itself as bound by confidentiality not to disclose the full terms of what Wilmar proposed. But Wilmar has made much in its recent communications about their concession to provide a Free-In-Store (FIS) proposal to QSL, so QSL believes we should provide some context to this key issue.

Unlike standard FIS title arrangements, Wilmar’s quasi-FIS terms would have QSL pay in full and accept title for the growers’ economic interest in sugar (GEI Sugar) when it arrived at the terminal, but Wilmar would retain the control of that sugar until it was exported. In short, while QSL would own the growers’ GEI Sugar it would have no control over that sugar’s management while it is in that terminal. It’s like buying a car but being told by the salesman when and where you can drive it. We reject Wilmar’s contention that controlling sugar owned by QSL is necessary because QSL is the operator of the terminals – we have a long and successful track record of serving multiple marketers. read more

Member Update – A message from QSL CEO Greg Beashel

Kalagro

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Dear Kalamia Members,

Please find below a message from Greg Beashel, CEO of QSL.

Dear Grower,

You may have seen a statement from Wilmar this afternoon regarding our current negotiations with them for the implementation of Marketing Choice.

The negotiation process is always an arm wrestle – as I’m sure you have probably experienced yourself as a result of Cane Supply Agreement (CSA) negotiations. In fact, many growers may dismiss Wilmar’s communication today as just another attempt to pressure them into signing CSAs.

Our message to you regarding this matter is simple:

· The current On-Supply Agreement (OSA) terms put forward by Wilmar are, in our view, commercially unreasonable and force unnecessary costs and risk onto growers who choose to access QSL’s services under Marketing Choice.

· We have a constitutional requirement to act in the best interests of the industry we serve, and as such, we believe Wilmar’s current offer is unacceptable.

· We have been restricted from detailing the full extent of our concerns regarding Wilmar’s proposal due to the confidentiality restrictions associated with the current negotiations, and we reject their assertion that we have breached these. This is the first time we have heard this claim and we are surprised Wilmar has chosen to raise it in this way.

· QSL feels very strongly that Wilmar’s current OSA proposal is so unreasonable that it stymies the proper implementation of the Marketing Choice legislation.

· We believe Wilmar should be transparent and make the full details of their OSA proposal available to growers, so that those growers can make an informed assessment of the proposal’s implications on their Marketing Choice options.

· QSL’s Standard OSA Term Sheet was shared with industry back in May this year and is available on our website (kalagro.us3.list-manage.com/track/click?u=a1ba66844415ae49d91df94ac&id=618579a67d&e=cc4d914f5a) read more

KCGO Members Update on Agreements

Kalagro

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Dear Kalamia Members,

UPDATE on Agreements

This morning your Directors and BDCG met with the QSL Board in Townsville to gain a proper understanding of where QSL is in its negotiation of an On Supply Agreement with Wilmar, this being the critical agreement for QSL to be able to offer itself as a GEI Marketer.

They advised they are in continuing discussions with Wilmar, but are not prepared to accept some of the terms Wilmar are proposing. They are considering options if there is no breakthrough in discussions in the near future. These may require some costs to growers to be set against the additional revenue QSL may achieve for growers through their marketing and selling expertise.

Your Directors pressed the need for QSL to make its position very clear very soon, not only so growers can make reasonable decisions about Forward Pricing with Wilmar or holding off in the hope of being able to price with QSL, but also so that BDCG can determine what to do in its next negotiations with Wilmar or in any call for arbitration.

It was agreed that the next few weeks will be very important for all involved in determining how and when Agreements will occur.

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