Media

Manufacturers benefit with CEFC Energy Efficient Loan program

6 March 2014


Manufacturers and food processing businesses are benefiting from the Clean Energy Finance Corporation (CEFC) and Commonwealth Bank's $100 million Energy Efficient Loan program, with finance for equipment to increase energy efficiency, save on their energy costs and boost competiveness.

CEFC CEO Oliver Yates said the program is enabling manufacturers and food producers to upgrade with new technologies and energy efficient equipment to accelerate energy productivity gains, increase capacity, improve profit margins and reduce emissions.

From Victoria's fruit producing heartland to its northern border, the CEFC and Commonwealth Bank are financing rural and regional manufacturers and food processors to future-proof their operations.

"The Victorian manufacturing sector is an important contributor to the State's economy, but the high Australian dollar, import competition and weak export markets make it tough for many regional and family-owned manufacturers to access funds to grow and innovate," Mr Yates said.

Mr Yates said energy costs can be a major input cost for many food producers and manufacturing businesses and by upgrading to new technologies and more efficient equipment they can really make a difference to their business and improve profit margins.

While there may be a strong business case for implementing energy efficiency measures, firms often find sourcing suitable finance a challenge to making these investments.

The CEFC and Commonwealth Bank are working to enable good projects get underway through the Energy Efficient Loan program, providing finance that is tailored to agribusiness and manufacturing needs, and matched to the cost savings these projects deliver for these businesses.

"This program is providing clean energy finance opportunities for manufacturers and other sectors at a scale that simply hasn't existed until now," Mr Yates said.

"New productivity initiatives financed through Energy Efficient Loans are helping these businesses remain the backbone of their communities, providing local employment opportunities and helping manufacturers to remain competitive in a rapidly changing environment."

Businesses which have already benefited from the CEFC-CBA Energy Efficient Loans include: 

  • In Wandiligong, family business Nightingale Bros Pty Ltd has been growing Alpine apples for 60 years and supplies about 20 per cent of Australia's total chestnut production. The firm is expecting to cut its energy costs by about 40 per cent through upgrading to a modern ammonia-based refrigeration system.  Refrigeration accounts for up to 85 per cent of energy consumption in cold storage businesses, so the saving will have a significant positive impact on the business's bottom line.  
  • In Irymple, Global Roto-Moulding Pty Ltd, a manufacturer of specialised engineered plastic products such as water tanks, children's playground equipment and custom moulded machine parts for industry and primary producers, is expecting to more than halve its oven energy use through an upgrade of its rotational moulding ovens. This will help Global Roto-Moulding to retain its competitive edge and operate in an environmentally responsible manner.  
  • Wodonga Rendering and Wodonga Abattoirs are installing a $4 million gas-fired trigeneration plant that will supply electricity, hot water and steam.  The plant is estimated to save about a third in energy costs and CO2-e emissions due to reduced grid electricity usage.  This will help the business stay competitive in its export markets.  

Commonwealth Bank and CEFC have also provided finance to: 

  • Melbourne headquartered Labelmakers, the largest supplier of innovative label solutions for a variety of market segments in Australasia, who reduced energy costs by about 14 per cent while making substantial operational savings by installing three new energy efficient presses that operate at twice the speed and half the energy of their old ones. Labelmakers provides labelling solutions for a wide range of market segments, across food & beverage, personal care, household products, pharmaceutical and general retail.  Watch the video
  • Shepparton based apple and pear suppliers Radevski Coolstores is expecting to reduce energy costs by about a quarter with a refrigeration system upgrade for its 16 cool rooms. Radevski Coolstores supplies Coles and wholesale markets along the Australian Eastern seaboard. Radevski Coolstores and Orchards is a family business that has been growing, storing and packing fruit in the Shepparton East area for over 50 years. Watch the video

"Enabling business to access funding to adapt, invest in productivity enhancing upgrades and grow is critical. We need a vibrant, innovative competitive private sector that creates jobs and builds strong rural and regional communities, whilst reducing emissions," Mr Yates said.


ABOUT THE ENERGY EFFICIENT LOAN PROGRAM

Under the Energy Efficient Loan (EEL) program, the CEFC and Commonwealth Bank are co-financing loans for businesses to save on their energy costs. The EEL is designed as a cost-effective financing solution to help businesses, particularly those from the manufacturing sector, upgrade equipment to reduce their energy costs while preserving precious working capital.

Information about finance under the EEL program is available from Commonwealth Bank Relationship Managers or Asset Finance Business Development Managers.