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United in the face of fertile competition

UNITED Farmers Co-operative has foreshadowed more intense competition in Western Australia’s fertiliser market following the opening last week of its new bulk handling facility at Kwinana.

The $11 million project was a joint initiative, with Fremantle Ports meeting most of the cost and United investing about $1.5 million in specialist equipment.

United, which is the smallest of the ‘big three’ players in WA’s $500 million fertiliser market, has taken a 21-year lease over the new facility.

The facility has a storage capacity of 80,000 cubic metres, double that of United’s previous facility, and will also be substantially more efficient.

It can discharge ships four times faster, blend fertiliser five times faster and turn trucks around five times faster.

The opening of the bulk-handling shed coincided with the first concrete pour at United’s first fertiliser processing plant.

United chief executive Tony Usher said construction of the $8 million fertiliser plant was now under way on land adjacent to the bulk-handling shed and he expected it to be completed by December.

The new compacting and granulation plant will reduce United’s reliance on imports and broaden its product range.

United chairman Rod Madden said the bulk handling facility set a new benchmark for industry efficiency.

“Speed and efficiency have huge implications in bulk industries, where the cost of double handling can be phenomenal,” Mr Madden said.

“Like most fertiliser suppliers, previously we unloaded ships onto a wharf then moved the product to a warehouse by truck.

“Now it is moved direct from ship to facility via conveyor belt, which raises the bar on environmental standards and removes a costly link in the chain.”

United, which has 3,000 farmer shareholders, has captured between 15 per cent and 20 per cent of the WA fertiliser market since it was established in 1992.

Its main competitors are industry leader Wesfarmers CSBP and Summit Fertilisers, owned 50:50 by a group of WA farmers and Japan’s Sumitomo.

As well as tackling the fertiliser market, Mr Usher said United had rapidly expanded its sales of farm chemicals.

Sales had grown from $4 million to $12 million last year, and he anticipated another doubling of sales in the coming year.

Speaking at the official opening of the bulk-handling facility, Planning and Infrastructure Minister Alannah MacTiernan said it could help to attract new customers to Fremantle Port’s outer harbour.

“This new facility will make full use of Fremantle Port’s new unloader and conveyor system and strengthen the port’s bulk handling operations,” Ms MacTiernan said.

She also praised United Farmers and Fremantle Ports for their commitment to protecting the environment by introducing strict dust and run-off controls during construction of the facility.

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