This document provides a submission in response to a consultation paper on developing a biomanufacturing industry in Queensland. It makes the following key points: - While Queensland has opportunities in biomanufacturing, given that facilities will likely be owned by foreign multinationals, the main challenge is ensuring significant economic benefits beyond just lower-paid jobs. - The main challenges are business development issues of attracting investment and developing local companies in this sector, rather than science/technology issues, as Queensland currently lacks companies capable of leading in this area internationally. - Support from government could include resolving disputes between cane growers and millers, facilitating partnerships between farmers and potential investors, and developing a supportive policy environment and

1. Copyright John Hine and Associates Pty Ltd 2015, www.developqld.net.au. Page 1
JOHN HINE AND ASSOCIATES PTY LTD
www.developqld.net.au
SUBMISSION
BIOFUTURES ROADMAP CONSULTATION PAPER
17 December 2015
Summary
It would seem highly likely that Qld has major opportunities to develop a broad biomanufacturing industry.
However, given that it is also highly likely that any such facilities will be owned and operated by foreign
owned multinationals, the challenge is how Qld gains significant economic benefits, other than lower paid
jobs in farms and factories. Such operations owned by multinationals may simply bring in their technology
plus senior managers, scientists and engineers and use locals for the less sophisticated jobs.
It is thus suggested that the challenges in facilitating such an industry in Qld are mainly business development
issues, not science and technology issues.
General Points
The consultation paper makes several sweeping statements which are challenged.
These include:
 Qldcan be an international leaderinthisindustry.
 The State iswell positionedtosupplythe forecastgrowthinthe domesticandinternational biobasedmarkets.
Certainly, Qld has the capacity to be a player in such an international industry but two points are made;
 Qldcurrentlyhasno companywhichhas the capacity to enterthisarea. Mackay Sugar maychoose to be a
partnerwithan overseasmultinationalinabiomanufacturingplantbutof itself istoosmall andhas no
experience insuchanindustryandno deepknowledge of the marketsforthe productsof such an industryforit
to be an international playerbyitself. So, itwill be hardfor Qldto be an internationalleader.
 By comparisonwithexistingplayerssuchasthe US, Brazil,and potential new playerssuchasvariousAfrican
nations,Qldhaslimitedvolumesof rawmaterial andrelativelylimitedscope toincrease the volumesof raw
materials. So,Qldislikelyonlytobe a minorinternational supplierof biobased products.
The above should not detract from efforts to develop such an industry in Qld and to facilitate the development
of Qld companies active in this area. There is likely to be real potential here for Qld. However, players may
not come from the traditional agribusiness sector.
Tel: 07 3264 4568
Mob: 0432 027 744
Email: john@developqld.net.au
ABN: 67 157 769 901
74 Ballinger Crescent
Albany Creek Qld 4035

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The Discussion Paper implies that the main opportunities are from sugar cane bagasse and sorghum. This may
be so but there may be opportunities in;
 Algae growninpondsinwesternQldwhere there are few alternative businessoptions andavailablecheapland
and water. The technologyhere maynotbe as well developedaswithcellulosicfractionationbutthisshould
be investigated.
 Biomanufacturingusingwaste paper,newsprintandcardboardincities. Such operationsmaybe logical to
collocate withpaperandcardboard recyclingfacilities.
 Biomanufacturingusinggreenwaste fromcitiesandunsaleablefruitandvegetablesmaybe technicallyfeasible.
However,the issue of rawmaterial scatteredoverawide area andthe cost of transport to central processing
pointsmaylimitopportunities.
 Usinghighorganic waste as a fermentationmaterial formethane productionisalreadybeingusedinseveral Qld
abattoirs. Applicationof suchtechnologymaybe feasible inotherareaswhere highorganicwaste isproduced.
Local Governmentswouldhave the detailsof suchfactoriesetc.
Responses to Questions, on 12 of the Consultation Paper
Key challenges to a commercial biotechnology sector
These are;
 Make a determinedefforttoendthe currentunproductive dispute betweencane growersandmillers over
ownershipandmarketing of rawsugar. A productive businessrelationshipisthe onlywayforward. The new
sugar marketinglegislationjustpassedbythe QldParliamentis nonsense. Also,itonlyappliestorawsugar,
not molassesorbagasse,the foundationsof a cane-basedbiomanufacturingindustry. Resolvingthissituation
will take considerable effortbutitissuggestedisthe biggestsingle barriertonew investmentinthe area.
 Much of the bagasse nowproducedinsugar millsinQldisnow burnt incogeneration systemstoyield
electricity. If thisbagasse isto be usedas biomanufacturingfeedstock,thenthe significantinvestmentin
boilersetcneededforthiscogenerationneedstobe consideredasan impedimentforthischange of use.
 DevelopingcompaniesinQldthatkeybe leadplayersinthissector. I cannot thinkof any at thisstage. We
needtodevelopone ormore ‘Atlassian’type companiesinthisarea. We have significant R&Dcapacitybut I
am not aware of anycompaniesformedinQldtocommercialise suchR&D.
 Catalyse the formationof arange of farm cooperatives,inthe cane growingsectorandothers,sothat farmers
can collectivelyparticipate inbiofuturesopportunities. Individual farmersmaywishtoinvestin a
biomanufacturingplantbutsuchaprojectmay not wishtoaccept smallerinvestors. Farmersinacooperative
may be able to make a largerinvestmentthatmightbe welcomebysucha large project. Such cooperatives,or
otherwaysof bringingfarmerstogether,maybe betterable toparticipate innew businessmodelsthatcould
give farmersequityinabiomanufacturingplantbyofferingsecure,longtermraw material supply andother
mechanisms.
 The Qld Governmentshould seriously consideradoptingthe National CooperativesLegislationasdevelopedby
the NSW Office of FairTrading. Such legislationshouldallow fornon-farmerstobe partof a cooperative so
that additional capital andsourcesof expertise canbe accessed. A phone call tothe Qld Office of FairTrading
showedthatthe staff respondingtothisphone call hadno knowledgeof thislegislation beingconsidered.
Nationallyconsistentlegislationisalsoessential togetrealistic nationalsupplychains. There isadegree of
urgency here.
 Farmerswhomay wishto supplyrawmaterial,egsugarcane,sorghum, wouldverylikelybe requiredtohave
auditable environmentmanagementsystemsinplace ontheirfarm. Encouragingthe adoptionof such EMS is
a role of government. It wouldbe useful tomake sure thatthe current BestPractice Managementsystemfor

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cane growingmeetsinternational standards andincludesthe growingunderstandingof bestpractice cane
growing, harvestingandtransport.
 Explore the issuesbehindthe growingof oil-seedlegumetreesinthe semi-aidnorthof Qld. A group at the
Universityof QldwasworkingonPongamia. Care isneededassome similartreesegJatrophaandNeemhave
the potential tobecome woodyweeds.
 Explore the issuesof growingsugarcane andsorghumin areaswestof the Divide inNorthQldshouldbe
explored,whichshouldinclude;
o How thiscultivationcould deal withthe likelyhighnumbersof insects,smallmammalsandbirdslikely
inthese topical areas.
o How thiscultivationcouldcope withthe highratesof evaporationexperiencedintheseareas.
The government’s role in the development of a commercial industrial biotechnology sector in Qld.
This should be to encourage and facilitate such investment. However, the well-established Qld Government
rules for major project support and facilitation should apply. It would be hard to justify grants of any kind, with
the possible exception being infrastructure. Presumably, land for such facilities in regional Qld would be
relatively low cost, thus reducing establishment expenses and the need for establishment grants.
Reviewing the significant biomanufacturing research and commercialisation underway in the USA should be
undertaken, if not being done so already. This is likely to identify the key commercial players. Such review
may be being done by CSIRO or one of the Australian Government agencies. Again, such links with these
agencies by Qld public servants may well be established.
Project facilitation should definitely be a key aspect of assistance. This would include assisting with the
building of good relationships between growers and the bioprocessor, proponents and local government etc.
Promoting Qld as a venue for biomanufacturing could be considered.
However, regarding projects linked to sugar cane bagasse, it would be as well to simply build good links with
the four main milling groups as to their intentions. It is very likely that these four groups have their own plans
regardless of any promotion by the Qld Government. Liaison with the overseas head offices of these milling
groups rather than the Qld offices would be logical.
Identification of other players in other areas such as algae, waster paper, newsprint, green waste and anaerobic
digestion and promotion of Qld to them is relevant. These may have been identified by existing reviews of
work underway in the USA.
A wide range of support services would be needed to attract and support new biofutures plants. Developing a
network of interested parties in, for example, R&D, engineering, environmental management, agriculture,
industry associations and business and technical consulting would be useful.
An ethanol/biofuels mandate may be relevant but there may be some caution by companies to increase ethanol
production given the possibility of electric cars. Trucks may well continue as a transport mode despite electric
cars given the long distances they travel and heavy loads they carry.
What policy setting could encourage such an industry sector?
A key issue is to work with the Australian Government so that national policy aligns with Qld policy. It has
been suggested that a reason Australia has not proceeded further down the road of biomanufacturing has been
national policy of caution regarding renewable energy, bioproducts etc. It may be that, with the Paris Climate
Change Conference Agreement, national policy will be more openly welcoming of bioprocessing.

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A clear statement of support for biomanufacturing is likely to encourage large companies to consider Qld as an
investment location.
Much of the government policy that might affect an investment decision may be local government policy. This
makes local planning schemes of particular importance.
How important will oil and gas prices be to the development of the sector?
No comment is provided on this issue.
How do we bridge the gaps between good ideas and bankable projects to realise the potential of industrial
biotechnology?
The Australian Government innovation policies are likely to be of most importance here. The Advance Qld
program needs to complement this national innovation program.
However, given that likely investors in projects based on bagasse and other woody fibre are going to be large
international companies, these companies may well have their own technology. This technology would have
been developed as a result of the significant funds available for such R&D in the US over recent years. So,
commercialisation of local research may be of lesser importance with such large projects.
Links between these companies and Qld universities may well be important to provide a local source of
technology expertise and may open the way for R&D contracts. Having a local R&D base may be important in
attracting investment in that the new project would have access to local expertise.
Locally developed biofutures expertise could be seen as an export industry in its own right, given that R&D is
an internationally traded service.
In newer areas such as algae, there has also been substantial research done in the USA so again an incoming
large company may have their own technology.
In an ideal world, it would clearly be desirable to grow companies in Qld which could undertake such industrial
biotechnology. However, the capital required for such projects would be significant and the management
skills of particular importance. Discussion with Qld Government owned power companies regarding their
participation in such new projects would be useful. The Tarong Algal Synthesiser Project, which includes a
range of institutional investors, may be a model for such new projects.
Other Qld Government power companies eg Stanwell, CS Energy etc could include alternative energy and
related opportunities such as biofutures in their strategic planning. Any energy company, in the public or
private sector, which relies on coal or gas fired power generation as its sole technology may experience
difficulties over coming decades.
The Qld Government should work with the Qld Investment Corporation to establish a ‘Biofutures Investment
Fund’, broadly similar to Infrastructure Fund Managers, set up by 30 Australian pension funds to pool funds for
infrastructure investment and share due diligence costs, see http://www.ifminvestors.com/. Strictly
commercial grounds should be used in investment criteria.
The newly released Australian Government innovation policy is likely to provide programs to grow local
companies. It is important to ensure that Advance Qld complements this national program. Developing
entrepreneurship training programs for wider use in Qld would be useful and to have a dedicated approach to
offering these to university students, especially postgraduates, would be relevant.

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What more can government and industry do to attract investment in this sector in Qld?
A key challenge for government is to work with the farm sector to increase, and improve the reliability of, raw
material supply. Issues here include:
 The current long-runningdisputebetweenQldcane growersandmillersneedstobe resolvedassoonas
possible. It issuggestedthatthe sugar marketinglegislationrecentlypassedbythe QldParliamentisunlikely
to resolve the situation. Itismore likelytodiscourage investment.
 A win-winwaytoincrease areliable supplyof sugarcane isto encourage the rapidadoptionof the BestPractice
Cane Productionsystemdevelopedbythe Qldindustry. Thishasthe addedadvantage of givingimproved
environmental outcomesaswell asreducingcostsbyreducingfertiliseruse and reducingfuel use through via
controlledtrafficfarmingand minimumtillage.
 A paperat the Tropical Agriculture Conference inBrisbane showedthatincreasesinharvesterspeedandshort
cane billetsizes,usedtocutharvestingandtransportcosts,can leadto a lossof upto 20% of cane as well as
damage to the ratoon structure. A more scientificapproachtoharvestingmayyieldreal dividends.
Exploring the opportunities for additional sugar cane or sorghum cultivation, possible linked to plans to
‘Develop the North’, could be useful. Also, further exploring whether oil-seed producing tree legumes such as
Pongamia could be safely grown in Qld would be useful.
The balance between government, industry and research support for such an industry
It is suggested that most of the R&D needed for such industries has already been done in the USA, where
substantial sums has been provided by the US Government for research into a range of bioproducts by a range
of leading corporations. At least three industrial scale plants are now operating in the US using this research.
It may be necessary to do local R&D to enable the US, or other, developed technology to be used in Qld. For
example, technology to fractionate the fibre in corn stover may need to be modified to use it with sugar cane
bagasse.
There is a strong case for saying that any future research to be done in Qld should be between the project
proponents, likely to be international companies, and Qld R&D groups, on a commercial basis.
Unless a Qld based company with significant resources has an interest in a project, there should be little
involvement by the Qld Government. Even then, such research should be funded through the various schemes
available under the Australian Government’s innovation programs.
Only where some catalytic research is needed, and a clear role exists for a Qld company in commercialising
that research, generally via funding from that company, should the Qld Government be involved.
There may be a case for assisting with funding for plant breeding aimed at sugar cane, sorghum, Pongamia etc
varieties specific for biomanufacturing in the Qld environment. Such work was underway for sugar cane at the
CRC for Sugar Cane Biotechnology before it was closed. This was breeding cane with cellulose and lignin
components relevant to bagasse processing for biomanufacturing. Care will be needed in protecting the
intellectual property of such plant varieties. Such work should also be done in close consultation with
biomanufacturing plants.
How do we ensure that Qld SMEs can participate in the global biotechnology value chain?
Such participation can be fostered by;
 Assistingcompaniesattainthirdpartyauditedqualityassurance schemes,JustinTime schemes,environment
managementsystemsandotherrelatedmanagementsystems. These managementsystemsare likelytobe a
prerequisite forcontractswithbiomanufacturingcompanies.

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 Encouragingthese companiestoengage withQldandAustralianGovernmentinnovationprograms,toassist
themwithan innovationculture. LinkingtheseSMEswith universitygroups andCSIROwouldalsobe useful.
 Facilitatingformal andinformal networksof thesecompanies. Thiswillenablethemtobetterbidforlarger
contracts and share keyequipment,staff etc. Such networkswill alsohelpthembidforcontractswithoverseas
projects. Networksof engineeringfirmssuchasHunterNetinNSWhasbeeneffective inassistingthesefirms
obtainadditional workafterthe closure of the Newcastlesteelworks,see www.hunternet.com.au.
 Encouragingsuch companiestoregisterwiththe IndustryCapabilityNetwork,ICN,see
http://www.icn.org.au/qld_home,whichkeepsdataoncompanycapabilitysothattheycan more easilybe
linkedwithlarge projects.
 Examinationof the range of companiesonthe QldICN database toensure thatthese are relevantfor
biomanufacturingwouldbe useful. It maybe that the focuson companiesforthe database mayhave beenon
the engineeringandrelatedcompaniesrelevantformajormining,infrastructure andconstructionprojects.
 AssistingQldcompaniesofferingservicesandequipmentrelatedtogrowingsugarcane,sorghumandother
crops forbiomanufacturingexporttheirgoodsandservicestobiomanufacturingprojectsinothernations. This
couldlinkwiththe international companieswhichestablishinQldusingQldgoodsandservicesforsimilarplants
indevelopingnations.