A Perth-based agricultural business says a lack of understanding of the merchant shipping industry by domestic financiers is holding up its plans to establish a container shipping operation in Bunbury.
Bevan Elwin Pty Ltd, in partnership with great Southern farming group SGT Albany, is proposing to ship between 5,000 and 7,000 containers of specialised grain feed out of Bunbury to South-East Asia via Singapore each year.
However, Bevan Elwin said the company was having problems securing the $4 million to $5 million it needed to finance the acquisition of a vessel as a key part of the Bunbury proposal.
The company had been trying for almost a year, however domestic banks seemed reluctant to finance merchant shipping, he said.
“That seems to be the indication,” Mr Elwin told WA Business News.
According to the Australian Shipping Association, Australian shippers only carried 1.4 per cent of Australia’s 565 million tonnes of seaborne trade in 2001-02, while their share of the domestic freight task declined from 40 per cent in 1984-85 to 25 per cent in 2000-01.
“The finance industry just doesn’t understand merchant shipping,” Mr Elwin said.
Sourcing a ship had been made more difficult by tight global supply.
Mr Elwin ruled out chartering a vessel due to the cost and said that if private financing could not be arranged within the next few months the company could seek financial assistance from the State Government.
The revelations could be a setback for the Government, which recently announced an $11.5 million commitment towards establishing container-loading facilities at the Bunbury port and is keen on fostering a local shipping industry.
Industry sources who have knowledge of the proposal say that it is a huge financial challenge.
But Mr Elwin said a study had been undertaken that vindicated the economics of Bunbury’s position.
He said containerisation at Bunbury would allow primary producers in the South West to bypass the increasingly high costs of shipping and logistics associated with importing and exporting.
