GrainCorp. to Kick Off $60 Million Rail Upgrade as Competition Builds

Under GrainCorp’s previously announced $200 million ‘Project Regeneration’, designed to overhaul the company’s grain storage network across Australia’s Queensland, New South Wales, and Victoria, the company has allocated $60 million to upgrade 13 sites to improve the company’s rail efficiency as competition in the sector intensifies.

Through Project Regeneration and the development of more than 50 high capacity sites, GrainCorp aims to reduce rail costs by $5 per ton, and shift the transportation of 1 million tons of grain per year to its rail network and away from roads.

"Reduced complexity, faster rail loading times and shorter train cycle times will increase the volume of grain transported by rail and reduce supply chain costs, which translates to improved grower returns," GrainCorp chief executive Mark Palmquist tells the Sydney Morning Herald.

This network overhaul for GrainCorp comes after the logistics group, Qube Holdings has partnered with Cargill and Emerald Grain to build a competing port facility at Port Kembla under the joint venture name, Quattro Grain, and a failed $3 billion takeover of GrainCrop by U.S. rival, Archer Daniels Midland (ADM). There is also industry talk of the possibility that Quattro will build another bulk terminal as competition within the Australian grain sector builds.

Work under GrainCorp’s Project Regeneration is scheduled to begin this month, and should be operational for the receiving of this winter’s crop.