The biggest capital project at HPA right now is the construction of the new pelleting and packaging facility in Myrtleford. While we are yet to start work on site, engineering has been in full swing for almost 18 months. The design of the tower that will house the heart of the pelleting equipment is now complete. This was a complicated task, primarily due to the need to minimise noise from the 23-metre-high structure that is being built next door to land that is zoned for residential development. Major equipment components have also been sourced from the USA, Netherlands, Germany and China, with some already on site. We currently expect work on site to commence in August, with commissioning scheduled for early 2024.
As we approach the end of this financial year, budgeting is well underway for next financial year. Everyone is acutely aware of the current economic conditions that are challenging individuals and business’ alike, both in Australia and around the world. For HPA, this means significant increases in general operating and production costs. For the first time in approximately ten years, we are also seeing a significant reduction in demand for our Aussie hops, in combination with global oversupply. This surplus will be addressed through acreage adjustments for crop 2024 to ensure we don’t spend money growing hops we cannot sell. Our Victorian and Tasmanian farms will see some areas idled for 12 months (ie. the hops will remain in the ground but will not be strung or harvested). These areas will be chosen based on being consistently lower yielding, weed prone, and/or flood affected.