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Horsham Rural City Council.

RURAL AND REGIONAL COMMITTEE

Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional

Victoria.

The Horsham Rural City Council has pleasure in presenting comment to the Rural and Regional Committee at the Parliament of Victoria’s inquiry into opportunities for increasing exports of goods and services from regional Victoria.

Overview.

Horsham Rural City Council encompasses a large area of Victoria’s highly-productive, broad acre dryad cropping and grazing land. The region is one of the world’s largest grain, pulse and oilseed growing areas, and export around 60% of total harvest. The economy is heavily reliant on agricultural production, which contributes millions of dollars each year to the Victorian economy and is fundamental to Horsham’s strength.

Horsham plays a leading role in the Wimmera’s agricultural industry, providing many of the support services necessary to sustain agricultural production as well as research, development and value-adding opportunities.

Horsham is strategically located at the junction of the Western, Wimmera and Henty Highways. The Melbourne-Adelaide railway line, which passes through Horsham and has the Wimmera Intermodal Freight Terminal at Dooen, is part of the larger East-West corridor that includes the Sydney-Adelaide and Adelaide-Perth lines.

The terminal capacity is in excess of 20,000 containers per annum and provides a central location for grain handling and export processes as well as improved access to sea ports. Horsham Rural City Council has a precinct development plan to guide further investments around the terminal.

Mining activity in the Wimmera region is growing and diverse with 34 exploration licenses across Horsham and its neighbouring municipalities. The region has accessibility to large scale, high quality mineral sands and significant competitive advantages like secure water resources, established, experienced support industries and high levels of liveability for the workforce. With demand for mineral sands expected to grow worldwide Horsham is well positioned to deliver to the market.

(a) What is exported from regional Victoria and in what quantities?

The major exports from Horsham have traditionally been cereal and legume grains with large bulk shipments leaving from Portland, Geelong, Melbourne and Adelaide. This produce is transported to port via either the road or rail networks subject to their availability when required.

Over the past ten years we have experienced significant growth in the containerised exports of legumes and cereal grains as the world markets demand a more regulated supply chain.

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Horsham Rural City Council.

By packaging up smaller grain parcels in containers, grain merchants have expanded their markets into more countries and driven a greater demand for containerised product. Whilst there are many countries still purchasing bulk shipments containerised grain markets are expanding.

Horsham Rural City Council with support from both the State and Federal Governments has established the Wimmera Intermodal Freight Terminal (WIFT). This purpose build facility has been designed as the transfer point for containerised freight from road to rail. Since opening the $17 million terminal the area has experienced growth in containerised grain exports. The terminal currently service 15 regular customers who pack and process cereal and legume grains or hay products for the export markets.

Container Exports from WIFT

Year Road Rail Total

2010-11 5,200 8,421 13,621

2011-12 5,162 11,460 16,662

2012-13 8,320 16,050 24,370

(Units are based on TEU- twenty foot equivalent units.)

The average weight of grains packed in containers is 22 tonne for road freight and 25 tonne for rail. Grain processors and packers would like to see these weights increased to maximise container space, this is also subject to the density of the grain being packed. Currently the main products exported via container freight are cereal grains, oil and pulse seeds.

The region has exported small quantities of heavy mineral concentrate as part of the mineral sands project development and subject to investment partners the mineral sands projects could become a major exporter for the Wimmera region.

Currently the WIFT facility processes approximately 500 imported containers annually generally containing farm chemicals, fertiliser or machinery parts.

(b)What competitive advantages does regional Victoria have in international markets?

Our location and the availability of land and water are our biggest advantage Horsham has to offer potential import and exporting companies. Room to build support infrastructure close to the WIFT offers opportunity for growing and developing further business opportunities.

Horsham Rural City Council is in the early stages of implementation of the Wimmera Intermodal Freight Terminal Precinct Structure Plan. The plan will help drive future investment for processing of raw products for export close to the primary source of production. The region has natural advantages for export and imports including available land, great support industries, a diverse and adaptable labour resource aligned with a road and rail network connected to four major ports.

Our rail freight network has the ability to shift large volumes of freight in one logistical move direct to the wharfs. By processing products close to the point of production you reduce handling costs and only freight the finished products.

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Horsham Rural City Council.

(c)What are the success stories from regional Victorian exporters?

Horsham and the Wimmera region have several hay and grain exporters that display expertise in the export markets by tailoring their customers’ demands for product and delivery to suit their production timelines. In the past with bulk shipments of grain customers would have to purchase extremely large quantities of grain which causes freight and storage problems but by moving to containerised products grain purchases can be regulated to suit final production requirements.

Another innovative approach at the WIFT has been to trial the bulk loading of grains into bulk train wagons within the terminal using portable equipment. This trial incorporated placing a large drive over hopper adjacent to the rail staging lines and then grain was delivered in truck and placed straight into the wagons. Normally the grain would be dumped into a hopper, elevated into higher elevated bins and then gravity fed into the wagons. This process reduces doubling handling of grains which reduces costs and improves grain quality. By being able to fill directly into wagons the infrastructure costs a greatly reduced and this type of facility could be shared by many grain marketers looking to move bulk shipments of grain via rail.

Bulk grain loading trial.

(d)What difficulties are faced by existing and potential exporters?

For allow for future growth of our regional exports we require infrastructure upgrades to our regional rail networks. Currently the main rail line between the Wimmera Intermodal Freight Terminal and the Port of Melbourne has an 80 kilometre section of line that needs major upgrading. This upgrade would allow for heavier containers to be packed and allow for more containers to be loaded per wagon. Currently axle weights per carriage are limiting

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Horsham Rural City Council.

efficiencies of our rail providers. Further improvements are needed to upgrade more rail lines to standard gauge; this would allow for better utilisation of current rolling stocks and open up alternative routes for rail freight.

Another area for improvement would be the delivery of containers directly to the wharfs; currently the rail providers believe the restrictions and regulations inhibit the rail freight logistic supply chain. Communications between rail providers and Government bodies controlling infrastructure were also identified as an area requiring improvement.

(e)What can the State Government do to support exporters?

With continued export growth of containerised grains from the area we have a preference for exporting companies to utilise rail transport over road. To help facilitate this it is imperative that the State Government continue to fund the Mode Shift Incentive Scheme. Together with this scheme and upgraded rail infrastructure we can grow our regional exports by packing heavier containers. By utilising rail services over road we are reducing the impacts on the environment, reducing the number of heavy vehicles on the highways, reducing congestion in metropolitan areas and protecting our road networks.

The State Government has a history of promoting international trade and export opportunities through initiatives like the Super Trade Missions and exporting programs. These programs are of great benefit to rural and regional Victorian business operations and need to be continued into the future, further supporting the Food to Asia Action Plan.

The availability of specialised staff to assist with exporting within State Government teams like Regional Development Victoria have assisted many regional operators take the first steps towards exporting, these specialised teams need to be retained to help new exporters into the future.

Further investment into infrastructure by the State Government is required. Continued maintenance and upgrading of the rail lines is critical to the efficiency of transporting export products to ports. Critical issues include the congestion in the metropolitan system, port access and ‘last mile’ (in)efficiencies, weight and speed restrictions due to maintenance of the infrastructure, and of course the inefficiencies of the dual gauge systems.

The freight task on regional highways is growing, with community safety issues, as well as cost effectiveness of road transport for grains and other produce. The duplication of the Western Highway between Buangor and Stawell will help to reduces travel time between the region and the Port of Melbourne and export markets.

Colin Kemp

Economic & Business Development Manager

Horsham Rural City Council

18 Roberts Avenue Horsham

colin.kemp@hrcc.vic.gov.au

03 5382 9783