South West Food Processing Precinct

The South West Food Processing Precinct report, prepared by Cardno (WA) Pty Ltd was commissioned by the Department of Primary Industries and Regional Development (DPIRD), Landcorp and the South West Development Commission (SWDC), and supported by the Department of Planning.

The study assesses the comparative advantages and risks of six sites in the south-west region of Western Australia for suitability for establishment of a food processing precinct, and recommends a preferred site for further detailed investigation.

The study assessed locations at South Burekup, South Gwindinup, Scott River, Manjimup, Waterloo and Yalyalup.

An executive summary is included below and a full copy of the report can be obtained by contacting Trina Anderson, Trade and Agribusiness Development on +61 (0)8 9368 3640 or trina.anderson@dpird.wa.gov.au

Executive summary

The purpose of the South West Food Processing Precinct (SWFPP) study was to assess the comparative advantages and risks of six sites in the south-west region of Western Australia for suitability for establishment of a food processing precinct, and to recommend a preferred site for further detailed investigation.

It is considered that identification and protection of a suitable site for the establishment of major industries associated with processing and value-adding agricultural food produce within the South West would benefit economic development and the sustainability of food producing industries in the region, including amongst others the red meat and dairy industries. Possible industries that might locate within a dedicated food processing precinct could include abattoirs, milk processing and rendering works, along with support industries and infrastructure.

As part of the South West Region Industrial Land Study and the Manjimup SuperTown Growth Plan projects, six possible sites were identified as having potential for industries including food processing. These sites were:

• 514 hectares in South Burekup, in the Shire of Dardanup
• 652 hectares in South Gwindinup, in the Shire of Capel
• Two sites in Scott River; one 472 hectares in the Shire of Augusta-Margaret River and the other 480 hectares in the Shire of Nannup (for analytical purposes, these were considered as a single site due to their proximity)
• Two sites totalling 167 hectares within the Manjimup industrial area in the Shire of Manjimup (for analytical purposes, these were considered as a single site)
• 1511 hectares in Waterloo in the Shire of Dardanup
• 776 hectares in Yalyalup in the City of Busselton

Although a range of activities could be considered to be ‘food-processing’ and might be suitable for location within a dedicated food processing precinct, for the purposes of undertaking this study some assumptions were made about the most probable major industries that would locate within the core area of the precinct, their land area requirements, and timing.

The assumed land uses were:

• beef abattoir
• pork abattoir
• chicken abattoir
• milk plant
• rendering
• truck wash.

A core area of 150 hectares was assumed, which would be developed in 30 hectare stages (30 hectares per major land use commencing in year one and then every five years thereafter - 20 years total).

The truck wash facility was not considered to be a major land use for the purposes of infrastructure, but would be an essential ancillary facility for the other activities. Saleyard facilities were not considered in this study.

Methodology

A four-step process was used to identify a preferred site:

1. assess site against critical criteria
2. multi-criteria analysis to identify shortlist
3. detailed assessment of shortlisted sites and order of magnitude costs
4. multi-criteria analysis and qualitative risk assessment to identify preferred site.

The first stage scanned the six sites against pre-determined critical criteria for fatal flaws. Using a high level multi-criteria analysis, sites that appeared at this high level to be suitable for food processing were then shortlisted in stage two.

The short listed sites were then subject to further analysis against a series of detailed criteria relating to physical and environmental characteristics, planning considerations and potential impacts.

This analysis was based on desk top review of available information, augmented by drive-by site visits.

Order of magnitude cost estimates were identified for infrastructure, current capacity, required upgrades, costs and impediments to upgrades for each of the shortlisted sites.

The final stage was the preparation of a multi-criteria analysis of the four short listed sites using the results of the detailed criteria and order of magnitude cost estimates in the key areas of:

• land status
• infrastructure
• transport linkages
• environment
• waste management
• workforce, services and support business
• social amenity impacts
• strategic potential.

The multi-criteria analysis scores were confirmed at a workshop of the Project Steering Committee, at which time a qualitative risk assessment was also prepared for the short listed sites to assist in future decision making. A preferred site – Waterloo – was confirmed at this workshop.

Stage one - critical criteria assessment

Consultation with service agencies was undertaken to determine the status of the six candidate sites in relation to availability and access to high voltage electricity supply, gas, potable water and waste water disposal.

Aerial photography and consultation was used to identify the occurrence of sensitive land uses in proximity to the sites, and Main Roads WA online mapping identified the location of designated heavy vehicle routes.

A high level multi-criteria analysis was developed specific to the project requirements. This allowed a combination quantifiable and degree of difficulty assessment to be applied. The criteria were based on the proposition that any precinct would be able to gain approval within three years.

The criteria that were deemed to be critical to be available and accessible in the short term (less than three years) were:

• high voltage electricity supply up to 15MVA
• gas connectivity up to 50GJ/h
• potable water to 2ML/day
• sewer connectivity or sufficient land for ponding (waste water)
• minimum distance to sensitive land uses
• proximity to heavy vehicle access (network one and two)
• travel time to regional towns.

It is important to note a number of qualifications that applied in the assessment process. These were:

• regional centres are defined as Bunbury, Busselton, Collie, Manjimup

• potable water based on advice from WaterCorp, Aqwest and Busselton Water

• power demands require demand analysis to confirm capacities of nearby mains

• the Albany to Bunbury gas pipeline is likely to be operational within three years

• restricted access vehicle (RAV) category roads conditions - restrictions/limitations on type of heavy vehicles not considered at this level of analysis

• A 1000 metre buffer was assumed around each site for the purpose of estimating the number of potentially affected sensitive land uses, on the basis that activities requiring more extensive buffers would be located towards the centre of each site.

Stage two – short listing

Sites were scored according to the quantifiable aspect of each criterion, and a multiplier applied according to the cost or degree of difficulty of achieving the criterion. The analysis identified the following sites as suitable for further assessment:

• Waterloo
• South Burekup
• Yalyalup
• South Gwindinup

Scott River and Manjimup scored lowest and were not considered further. Particular issues with these sites that resulted in their low scores were:

• Scott River – remoteness from most services and from regional towns, which will be the primary source of labour and business services.
• Manjimup industrial area – proximity to urban area containing a high number of sensitive land uses, and significant existing issues with the capacity of existing water supply in the town.

Stage three - detailed analysis

Detailed analysis for each of the short listed sites was undertaken, covering the following areas:

• land status – zoning, ownership, existing approvals
• infrastructure – electricity, gas, potable water
• communications – telephone and internet
• environment – ecology, water, soils and topography
• waste management – waste water and solid waste
• access to workforce – accessibility for labour force and maintenance labour
• transport linkages – distance to port, heavy vehicle routes, site access
• social impacts – noise, dust, sensitive land uses, buffers
• strategic potential – compatibility with strategic land use plans, potential for co-location with other industries, potential for staged expansion.

Order of magnitude costs for any required upgrades to infrastructure were prepared in consultation with service agencies.

A high level summary of each site follows.

South Gwindinup

This rural zoned site is adjacent to State Forest. It comprises seven lots and four owners. It is presently being mined by Iluka Resources Ltd for mineral sands, with leases current on the site until at least 2031.

Proposed land uses would be classified as ‘noxious industry’ in the Shire of Capel local planning scheme and are not permitted in the current zone, which means land would have to be rezoned if the site were selected for a food processing precinct.

This area does not feature in any strategic plans for the south-west region.

There are few sensitive land uses in proximity to the site, with only one dwelling identified within one kilometre of the site.

Due to mining activities, the site is largely cleared of native vegetation and there are no sensitive environmental or heritage features that would require protection.

The site is accessible to the heavy vehicle network from Cain Road, which is an RAV network road.

In terms of servicing, water supply could be the most difficult to achieve as there is no spare capacity in the nearest water supplies at Capel and Donnybrook. An alternative supplier would have to obtain approval through the Economic Regulation Authority to extract and distribute water from the underlying Yarragadee Aquifer, however the remoteness of the site and the slow customer take-up make it doubtful that an alternative supplier could be attracted to this location.

The site is relatively elevated, with regional groundwater mapping indicating depth to groundwater exceeding five metres.

The site is an irregular shape. If selected for a food processing precinct, the core area would be best positioned centrally, so that most of the potential buffer zones could be accommodated within the site and over the adjacent State Forest. Potential buffers would still extend beyond the site boundaries.

The site ranked third out of the four shortlisted sites, once the criteria were scored using the multi-criteria analysis.

Qualitatively, South Gwindinup is assessed as being high risk in terms of its ability to attract future industries and growth or viable servicing. This is primarily due to its relatively remote location. The site was assessed as low risk for social licence.

South Burekup

The site is comprised of 14 lots owned by five landowners and is zoned for ‘General Farming’ in the Shire of Dardanup planning scheme.

It is located to the west of and overlooked by parts of a Landscape Protection Area associated with the Ferguson Valley, which accommodates various tourist attractions and accommodation.

There is possibly more risk in terms of social impact associated with visual impact for this site than any others, notwithstanding that there are very few sensitive land uses within close proximity of the site.

Food processing activities are likely to be classed as ‘noxious industry’ and would not be permitted under the current local zoning.

The site is primarily used for mineral sands mining by Doral Mineral Sands Pty Ltd.

Current mining leases are valid until 2035, although Doral has verbally advised that current mining activity is anticipated to be completed in late 2015. Unless the leases are surrendered, however, there can be no guarantee that the site would be available for other purposes from 2015.

The current mining activity already involves heavy vehicle movements, so the introduction of a food processing precinct to the site would not have a significant impact in these terms. However the nearest RAV network road, O’Connor Road, is 500 metres distant.

The nearest existing potable water supply at Burekup has no spare capacity and an alternative supplier would need to be found.

It is possible that Aqwest will extend its existing licence to include this area however its willingness to pre-fund a supply to the site would be subject to a business case which would take into account the likely uptake of supply by customers.

No regional groundwater mapping is available covering this area but site topography and previous investigations on this site suggest that ground water is generally deeper than two metres. However there is a multiple use wetland in the western part of the site, indicating a shallow winter groundwater level. There are several ephemeral waterways flowing across the site.

If selected for a food processing precinct, the core area would probably be located in the northern part of the site, to minimise the number of known sensitive land uses that would be affected by likely buffer zones.

The site ranked second out of the four short listed sites when the criteria had been scored using the multi-criteria analysis.

Qualitatively it has been assessed as high risk in terms of being likely to accommodate a staged approach based on a rational and financially viable servicing model, and social licence.

When a site with some land in common with the current site was considered in 2011 there was considerable community opposition expressed, and the Shire of Dardanup did not support a food processing facility in this area.

Waterloo

At 1511 hectares, this is the largest site considered.

Including drainage reserves, it is comprised of 43 land parcels controlled by 32 owners. The majority of lots are over 30 hectares in area.

The land is zoned rural, except for portions on the western edge that are affected by a primary regional road reserve under the Greater Bunbury Scheme, which relates to the future proposed Bunbury outer ring road.

Land in the northern part of this site has been identified as a suitable site for an intermodal transport facility to serve Bunbury Port. The site has immediate access to heavy vehicle roads, including the South West Highway.

In terms of its fit with strategic planning objectives, this site performs well. It is in close proximity to Picton Industrial Park and proposed industrial expansion of that estate, and is identified as a key site for future industrial expansion in the Greater Bunbury Sub-Regional Structure Plan 2013. Although currently zoned for rural purposes, rezoning to industrial in the Greater Bunbury Scheme by late 2014 is proposed.

Proximity to existing and proposed industrial areas means that the area will benefit from investment in service infrastructure and there will be other customers to make provision of the infrastructure a more viable proposition than is the case for some of the more remote sites. Aqwest is licensed to service the area and has mains adjoining the site.

The site is low lying, as indicated by the fact that the whole site is mapped as a multiple use wetland. However regional groundwater mapping is not currently available to indicate actual depth to groundwater.

Within one kilometre of the site boundary there are a number of industrial uses including Austral Brickworks and part of the Picton Industrial Park.

Within one kilometre there are several sensitive land uses on rural lots. However if this site is selected for a food processing precinct, the core area could be located so that likely buffer zones can be contained almost entirely within the site and without impacting any sensitive land uses beyond its borders.

This site was the highest scoring site when scored using the multi-criteria analysis.

Qualitatively, the site is assessed as having medium risk associated with is ability to produce a contiguous and staged development, its attractiveness to agri-industries, and land assembly. It was assessed as low risk for future growth and social licence.

Yalyalup

This site is comprised of nine sites owned by eight owners, including the Water Corporation which owns around 70 hectares adjacent to Wonnerup East Road. The site adjoins the Busselton Airport and is affected by planned extensions of the airport runway.

The site has good access to heavy vehicle routes, with frontage to both Vasse Highway and Sues Road.

Within one kilometre of the site boundary there is a significant number of sensitive land uses due to the development of land north of the site for residential purposes.

The site is currently zoned for agriculture under the City of Busselton local planning scheme however it is intended to rezone the land in the future to reflect current strategic planning relating to the airport and adjacent land. Most of the land is likely to be rezoned for industrial and airport purposes.

Northern parts of the site are likely to be constrained by proximity to the airport runway, which may affect the ability to build high structures (such as chimneys) or to locate activities that have potential to interfere in any way with safe aircraft movements (such as dust).

Much of the site is designated as multiple use wetland. No specific information is available on groundwater levels but this designation and the proximity of the Vasse River suggest that the water table could be within one to two metres of the surface.

The site is relatively close to existing or proposed services and current planning for the area by the City of Busselton means it is being considered for extension of services, however food processing activities are not part of current plans and hence would not be accommodated by those proposals.

The site is close to a potential labour force in Busselton.

If this site were selected for a food processing precinct, the core area would have to be located in the south-east corner of the site in order to avoid the proposed airport extension, proposed Water Corporation facility, and for potential buffers to avoid sensitive urban development that has been approved north of the airport. The buffer zones could not be accommodated within the site boundaries and would impact on some sensitive land uses south and east of the site.

Yalyalup was the lowest ranked of the four short listed sites when scored in the multi-criteria analysis.

Qualitatively, Yalyalup was assessed as high risk in terms of its attractiveness to agri-industries. This is primarily associated with the site not being central to a large agricultural catchment. It was assessed as low risk for social licence and land assembly.

Stage four – multi-criteria assessment and preferred site

Based on the information obtained in the detailed site analysis, each of the sites shortlisted were assessed using a weighted multi-criteria assessment. The scores are summarised in the following table:

From these scores it is apparent that the ranking is:

1.         Waterloo  (792)

2.         South Burekup  (674)

3.         South Gwindinup  (669)

4.         Yalyalup  (659)

Following this ranking, a risk assessment was conducted to assess the sites which offered the lowest risk to development.

The risk assessment was based on questioning the risk associated with:

• ability to produce a contiguous and staged development – (site is unlikely to accommodate staged approach based on rational and financially viable servicing model)
• future growth - (site is not well located for future growth in agri-industry sectors in the south-west region and/or other transformative projects)
• existing industries - (site is not in proximity to known agri-industry operations and unlikely to be utilised. Existing industries looking for more favourable geographic or supply chain advantages are not enticed to this site)
• social licence (community resistance to agri-industry development)
• land assembly (dispersed and/or multiple ownership of site will restrict land assembly or sequential development and staging).

The likelihood of the occurrence was correlated and scored against the impact of the occurrence through a risk matrix. The matrix is illustrated as follows:

Risk matrix used to assess the sites which offered the lowest risk to development.

All sites presented some level of risk. However Waterloo was assessed as having he least level of risk with all other three sites having some component which was regarded as having one or more critical flaws.

From the analysis, the preferred site in the south-west region for a food processing precinct is Waterloo.

There do not appear to be any significant environmental, social or regulatory constraints that would preclude the site from undergoing further detailed consideration.

Further investigation and planning of this site should be progressed to confirm its suitability and the most appropriate manner of development to establish a food processing precinct.

Waterloo was by far the best scoring site based on the multi-criteria assessment, and was the only one of the four short listed sites that did not score ‘high risk/high impact’ in any of the risk categories considered in the risk assessment.

At 1511 hectares, the site is the largest of the four shortlisted. This provides the greatest potential for retaining the required buffers within the site boundaries.

Given the level of analysis possible at this stage, the required buffers are mostly contained within the site and do not impact on any identified sensitive land uses located outside of the site area.

Being the largest site, Waterloo also has the largest number of individual land parcels and land owners. This presents some risk in terms of land assembly. However the land has already been mooted for industrial purposes and there has been some interest from landowners regarding the potential for their land. Furthermore, it is unlikely that all land within the Waterloo site will ultimately need to be acquired. The major concern will be to ensure that any existing sensitive land uses are not impacted by development as it progresses.

A land acquisition strategy will be required as the investigations progress and more clarity around actual land requirements is attained.

Strategically, the Waterloo site is an excellent fit and better aligned with strategic planning objectives than any of the other sites. The rezoning of the land to industrial under the Greater Bunbury Region Scheme is likely to be in place by late 2014.

The northern part of the site near the South Western Highway has been identified as a likely site for an inter-modal facility that will allow for the transfer of goods from road to rail and provide very good access to Bunbury Port.

Very good opportunities for synergies with existing and future industries are possible. There will be ample choice for complementary industries that would not be suitable for location within the food processing precinct to establish or relocate near the precinct. Major infrastructure already exists in very close proximity to the site.

The site is accessible via major established transport routes and with the establishment of the inter-modal hub, will also be very accessible to both domestic and export markets. Being close to Bunbury, there will be good access to a large labour pool and support services. The site is also within reasonable commuting distance from other population centres.

The buffer area will be suitable for the establishment of compatible industries and support businesses, and may also be used for grazing and related compatible rural land use to provide a visual buffer and transition with rural areas to the west and south.

Traditional practices for waste water treatment such as ponding remain current and are commonly used. There is adequate land for the establishment of waste water ponds and systems as required; although like most of the sites Waterloo has relatively high ground water levels. In practice all waste water ponds, no matter where they are located, are perched and lined with impervious material and constructed to minimise any risk of contamination of environmental water or soil.

Implementation requirements

In terms of the typical land development process, this comparative due diligence study is one of the earliest stages, as illustrated below. It will now be necessary to undertake more detailed investigations and feasibility assessments.

Detailed investigations and approvals are necessary for developing industrial land.

A formal feasibility, project planning, design and delivery process is still required, with the level of detail and certainty increasing at each stage. Further consultation with the Shire of Dardanup will also be necessary.

Before the site could be made available for establishment of a food processing precinct there would be a number of pre-requisites.

There are a number of ways the site could be protected including the declaration of a Planning Control Area or a Special Control Area as part of the Greater Bunbury Region Scheme.

• To prevent encroachment of sensitive land uses before or after establishment of food processing activity on the site, protection of the required land and buffers through a rezoning process is highly recommended. Rezoning under the Greater Bunbury Region Scheme to Industrial Deferred is already being contemplated.
• A Planning Control Area may be used to protect the area from development or to allow a particular development to take place that would not be acceptable under the underlying planning scheme for the area.
• Ultimately an amendment to the Greater Bunbury Region Scheme would be desirable to:
  • apply a Special Control Area over the affected land
  • rezone the land to industry if it is ultimately determined that the potential land uses cannot be supported within the current rural zone. It is noted that this is already proposed, and is likely to take place by late 2014.

• An amendment to the Shire of Dardanup local planning scheme to designate the land appropriately and allow food processing activities to be approved whilst limiting the potential for inappropriate land uses on the site will be required.

• Further detailed due diligence based on site investigations and consultation is advisable as part of development of a business case, to confirm the status of the site with regard to potential contamination, aboriginal heritage sites and environmental status (e.g. presence of rare and endangered species).

• Baseline study and monitoring of site contamination and groundwater flows should be commenced as early as practical in order to inform detailed planning.

• A structure plan for the site should be prepared, in order to define appropriate land uses and controls and define requirements for transport connections, service infrastructure locations and lot sizes, water management and environmental and cultural heritage management. This will require preliminary layout design and consideration of staging, including any required bulk earth works and infrastructure upgrades.

• A traffic impact assessment will be required as part of a structure plan. This will determine the routes to be used to service the precinct and road improvements, if any, that will be required as a result of predicted vehicle movements. Detailed information relating to vehicle movements and peak periods will only be able to be determined when there is a specific development proposed.

• The definition of a core area and extent of buffers is desirable based on detailed investigations and modelling. Modelling of buffer areas will only be possible if an actual end use is identified.

• More detailed investigation of site requirements for individual food processing activities is required in order to refine actual infrastructure requirements.

• Land assembly of the core area will ultimately be required to enable land development to occur. It may be necessary to acquire land within buffer areas if they are occupied by incompatible land uses.

• Further investigation of implementation models is required. A conventional model of subdivision and development and service delivery requiring developer contributions may be satisfactory. Alternatively, models that facilitate common use infrastructure and/or co-operative management could be explored. The strategic potential of a food processing facility for the south-west may warrant up-front funding of key infrastructure. Given likely budgetary constraints, alternative funding models may be desirable to supplement or replace direct Government funding or borrowing (eg: asset leasing arrangements).

A full copy of the Comparative Due Diligence report on the South West Food Processing Precinct can be obtained by contacting Trina Anderson, Trade and Agribusiness Development on +61 (0)8 9368 3640 or trina.anderson@dpird.wa.gov.au