January 25, 2007

Australia's GrainCorp silo closures save US$10m

Australian agribusiness giant Graincorp has saved about US$10 million by closing 85 of its silos last year.

As part of restructuring the storage network, the company made US$10 million in annual savings, said the bulk storage handler's managing director Tom Keene.

The closure of silos also resulted in layoffs and removal of a layer of management, according to Keene. The company could close more of its silos.

Keen said the company currently has 77 primary sites which receive 80 percent of grain besides 174 major sites and 35 custom storages in its network.

The closure of silos was part of company's effort to expand into non-grain products.

Some other measures included commissioning a US$6-million hardwood plant at Portland, generating revenue from wood chipping, spending US$25 million on new equipment and improving storage at its primary sites.

The company is now eyeing the export wheat and barley business this year as they offer excellent opportunities for GrainCorp, pointed out Keene.