A venture run by Australian sugar processors Bundaberg Sugar and Maryborough Sugar Factory is to close a mill in northern Queensland.

The Northern Milling Joint Venture, owned by Bundaberg and Maryborough, today (8 February) announced plans to close its Babinda mill.

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The company said it will transfer operations to its Mulgrave and South Johnstone mills and that it would identify opportunities to “redeploy” as many of the 62 employees at the site “as practicable”.

It added that the number of redundancies would depend on how many people could be transferred to other mills.

The joint venture said that cane growing and milling in the Babinda region would continue unaffected and growers would redirect their cane to either the Mulgrave or South Johnstone mills on existing train lines.

Maryborough Sugar Factory CEO and joint venture operations manager Mike Barry said the plan to close the Babinda mill was made due to the loss of large cane areas in the region over the past 10 years.

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He added that the final trigger for the proposed closure was a combination of the direct loss of around 300,000 tonnes of cane from the Upper Marry Kennedy region to a rival mill in Tully and a reduced forecast in the “quantity of available cane for the 2011 season”.

The joint venture said that if the closure goes ahead, the companies will invest an initial A$8m (US$8.1m) at the South Johnstone, Tableland and Mulgrave mills, so that cane can be crushed in a “normal season length for the region”.

Barry added that the proposed decision has been “very difficult to make”, but that the “reality was that continuing to operate Babinda mill was no longer viable, particularly given the excess capacity available at Mulgrave and South Johnstone”.

The company is negotiating with staff and union representatives, with a final decision likely to be made in about two weeks.

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