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EASTERN Australia's newest bulk grain loading venture, Newcastle Agri Terminal (NAT), is still a year from being fully commissioned but the operation is already set to expand into container exports, too.
Backed by international farm commodity traders, Glencore and Olam and Western Australia's CBH Group, construction of the new Carrington loading facility's 60,000 tonne silos will be completed by August.
Grain from next season's harvest is expected to be flowing at full throttle into vessels docking in Newcastle by January 2014.
In the meantime, plans are being drawn up to expand the 6000-square metre site to cover almost five hectares and introduce more value-adding options for grain traders or individual growers delivering to NAT's silos.
The container packing, blending and grading facilities will double the cost of the current $30 million construction project.
Although funding is still being raised and development plans are still to be approved, work is likely to be completed by early 2015.
The terminal's executive director Jock Carter said grain delivered to the site for packing would be exported direct from Newcastle, or rail freighted south to Sydney's big container terminal at Port Botany.
While financial support was initially difficult to find when he and business partner Martin MacKay began planning the independent NAT four years ago, Mr Carter said funding the container packing project was unlikely to be a problem, particularly as the grain hub's first stage was nearing its start-up date.
NAT's existing partners had an option to expand their investment, but other partners may be invited to put money towards the project, too.
He said while agribusiness infrastructure such as NAT's grain handling facility was not nearly as vulnerable to the commodity market and weather risks that can disappoint investors in farming ventures, it was frustrating that few local funding sources, like superannuation groups, were interested in agricultural projects in general."There was a lot of initial scepticism about what we could achieve, and super funds are really only interested in seeing a demonstrated cashflow. It was a bit disappointing," Mr Carter said.
He noted that despite a ballooning world population demanding more reliable food supplies, Asian and Middle Eastern investors seemed more likely to understand the value of agricultural assets.
Their longer term investment thinking reflected the fact that food security was already a real issue in these regions, while investors based in food-rich Australia seemed less motivated.
"It's interesting that GrainCorp's share price didn't really attract much interest last year until suddenly a multi-national with a strategy to gain more access to Asia drew attention to the fact that its true value had been overlooked," Mr Carter said.
"Australia's farm sector efficiencies will become more and more valuable as the task of producing enough food to meet global demand around the world gets harder."
NAT's grain loader and five silos are the first addition to Newcastle harbour's grain export infrastructure since GrainCorp expanded its port storage capacity, also at Carrington, in 25 years ago.
In March construction begins on NAT's rail pits for unloading grain delivered via the Bullock Island loop line, enabling fast grain receival and unloading capabilities of about 2000t/hour.
Mr Carter said although current construction activity could have been vulnerable to this week's torrential coastal rain and strong winds, the partly built storages showed no signs damage.
This article first appeared on www.theland.com.au
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