Substantial tomato processor Kagome raises fright on soaring gas costs

One in all Australia’s perfect meals processing centres has raised concerns over the manner ahead for the nation’s manufacturing industry if gas costs proceed to prolong.

Echuca-based fully Kagome Australia secured its gas contract for 2023 in January of this yr, $1 million higher than their 2022 contract.

Kagome Australia is the nation’s perfect tomato processing company, handing over tomato-based fully merchandise since 1996.

Chief govt Jason Fritsch said the tomato processing plant became once “very lucky” to get the contract early.

“If we had been to contract now for 2023 this is in a position to presumably per chance be within the portray of $6-$8 million up,” Mr Fritsch said.

“However the purpose is that the gas market within the meanwhile, obviously, is out of take care of an eye on.”

Mr Fritsch said gas contracts for 2023-24 are about $24-$25 a gigajoule, whereas the Kagome Australia contract secured earlier is $10 a gigajoule.

“That’d be very unhappy for the 300-uncommon workers that we enjoy had in our facility over the closing three months and, for the general honest meals that we make that’s been consumed here in Australia, Contemporary Zealand, and across South-East Asia.”

How did we obtain here?

Professor Ariel Liebman is the director of the Monash Energy Institute’s Faculty of Files Know-how and said Australia’s enthusiasm around gas export became once overwhelmed with contemporary geopolitical moves.

“When we stumbled on a bonanza of liquefied natural gas (LNG) opportunities up in Queensland we became reasonably excessive about exporting that gas,” he said.

“Up unless then we had a little amount of present, however a little amount of quiz, so all the things became once form of in steadiness. Now, , we enjoy develop into share of the worldwide market.

“The global market is finely balanced and when Russia withdrew about a of its presents as a result of battle, the costs spiked.”

Professor Liebman said the spike of gas costs presently facing Australians became once a “policy failure a few a long time within the making”.

So, what now?

Mr Fritsch is calling for govt intervention to establish a domestic reserve to get gas for manufacturing in Australia at a aggressive set.

“We’ll be aiming to take a seat down down with the Minister for Energy and explaining our remark, not perfect myself, the general collective,” he said.

” It might presumably per chance devastate the regional spot that’s the meals bowl of the Goulburn Valley.

“Australia has been and has remained aggressive within the manufacturing sector because we had a plentiful present of competitively priced vitality.

“If that disappears, or not it would kind it very complex for producers to proceed to operate.”

Professor Liebman additionally backs govt invention.

“Shall we obtain lucky, and we need to aloof one day search for a restoration of the Russian gas present, however that’s a brief repair,” he said.

“I teach if governments assemble something then this want to be the worst of it. In the occasion that they don’t assemble the leisure then it could presumably per chance obtain better for a while, however then it would obtain worse another time.”