SA lands first major federal manufacturing grant in lead up to state election

Denham Sadler
Senior Reporter

A project aimed at making South Australia the largest plant protein manufacturer in the country has landed the first large grant from the federal government’s manufacturing fund, just weeks out from the state election.

The Victorian-based Australian Plant Proteins has received a $113 million grant from the Commonwealth under the collaboration stream of the $1.3 billion Modern Manufacturing Initiative.

Simon Birmingham
Finance minister Simon Birmingham

This will see the company partner with the Australian Milling Group and red meat processing giant Thomas Foods International to establish three plant protein manufacturing facilities in South Australia, serving to quadruple production in the state.

The announcement by the Coalition government, the first to be made under the collaboration stream, comes less than three weeks before the South Australian election, with Liberal Premier Steven Marshall at risk of leading a one-term government.

The collaboration stream offers grants of between $20 million and $200 million for large-scale manufacturing projects that have business-to-business collaboration or business-to-research collaboration at their core.

The federal government grants can cover up to 33 per cent of a project, with the Australian Plants Protein project worth a total of $378 million. The South Australian government will also be contributing $65 million to this project.

It marks a sharp increase in the funds unlocked from the $1.5 billion Modern Manufacturing Strategy, which Prime Minister Scott Morrison unveiled in late 2020.

It was revealed at Senate Estimates last month that only $85 million had been released from the fund so far, with $292 million executed from it despite the Industry department budgeting for $550 million in this timeframe.

The first collaboration stream grant will “supercharge Australia’s place in the global plant-based food value chain”, finance minister and Senator for South Australia Simon Birmingham said in a federal government press release which also included quotes from Mr Marshall.

Australian Plant Proteins already owns Australia’s only commercial-scale pulse protein extraction facility, and will now establish three more in South Australia, which will produce 25,000 tonnes of pulse protein annually.

According to the federal government, the project will create 384 new direct manufacturing jobs by 2024 and eventually support more than 8500 new full-time positions in the supply chains and economy by 2034.

“This investment by government along with the private sector will put SA ahead of the pack in the manufacturing of products for the high-growth domestic and booming global plant-based food markets,” Senator Birmingham said.

“It is a major step forward in transforming SA into a plant-based protein manufacturing and export powerhouse. It will not only generate thousands of local jobs but has the potential to generate billions in export dollars for our state.

“Demand for plant-based foods is booming globally. Just as SA leads Australia in renewable energy generation this investment will put us at the forefront of capitalising on this environmental trend too.”

The significant federal government support for plant-based proteins comes in the same week that a government-led committee called for a clamp down on the promotion of plant-based “meat”, recommending mandatory regulation due to apparent “appropriation” of meat terms and animal imagery by the fast-growing sector.

The investment will help to grow Australia’s manufacturing sector, industry minister Angus Taylor said.

“Manufacturing is strong in this country and we want to see it become even stronger. Australian-made food producers with Australian produced and manufactured ingredients will give our good manufacturers a significant advantage in this rapidly expanding global market,” Mr Taylor said.

“These investments are about increasing the productivity growth and job creation that we know collaboration can deliver. We also know that every manufacturing job we create, at least another three are generated in other industries thanks to the multiplier effect that our investments have on the broader economy.”

Applications for the collaboration stream opened in August last year and closed less than a month later, with consideration running for more than five months.

This timeline and the inclusion of the Prime Minister as the ultimate decision maker on grants led to claims from the Opposition that rorts had been “baked in” to the manufacturing scheme, with a large number of grants expected to be announced before the upcoming federal election.

The government received 86 applications for the collaboration stream, with 81 deemed to be eligible. These applications were then passed on to an independent panel of 40 industry experts for review, who then gave them a merit score.

This process has been completed, with the applications handed to relevant ministers for review before being approved by the Prime Minister.

Applications for round two of the smaller Integration and Translation stream were also brought forward late last year, with winners to be announced before the election.

Do you know more? Contact James Riley via Email.

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