Growers in Australia’s Northern Territory have joined together to fund and build a cotton gin in the region for the first time, potentially making investment in cotton plantations there more viable.
The Northern Cotton Gin Development Group announced this week that the Northern Cotton Gin, owned “exclusively by all potential cotton growers in the Top-end of the Northern Territory and Western Australia”, will be operational for the 2022 ginning season.
The group has secured land for the gin adjacent to the main highway 35 km north of Katherine.
David Connolly, chairman of the NCGDC and general manager of Tipperary Station, declined to disclose the identity of individual investors or the value of the project, citing commercial confidentiality.
In March 2020, Connolly’s colleague Bruce Connolly told Agri Investor that Tipperary Station had planted 300 ha of cotton following successful trials in 2019, but he said the main barrier to further expansion was the “tyranny of distance”, with no cotton gin located in the region.
“There are no processing facilities in the Northern Territory,” Bruce Connolly said. “It’s a giant barrier because our closest [usable] facility is nearly 3,500 km away – in the southern regions I don’t think there’d be too many farmers who’d be more than 400 km-500 km away from their closest processing facility, at the outside.
“Whilst we’re able to achieve some discounts in freight costs by backloading trucks that would otherwise be returning south empty, we’re certainly not across the line and a processing facility in the north would make it that much more profitable.
He said then that a processing facility could cost anywhere between A$12 million ($92 million; €77 million) and A$40 million depending on its size.
In a statement on the location of the new gin, David Connolly said: “Module freight will be solved for all Top-end growers. Right now, cotton production is thinly spread out over hundreds of kilometres across Western Australia and NT. So, we have centrally located Northern Cotton Gin near Katherine.
“The gin will charge every cotton grower the same cost to freight modules, regardless of the distance, to Northern Cotton Gin.”
He added that the expectation is that all current and future cotton growers in the region would be able to join the venture to collectively own and control the facility.
Construction will begin in July this year. The facility will be operated by RivCott, a grower-owned cotton ginning business based in New South Wales.