Corporate Brisbane Under Remote Control After Floods Swamp Australian City

Macarthur Coal Ltd. and QR National Ltd. are among Brisbane-based companies being run from remote offices and employees’ homes after the city’s worst floods since 1974 swamped the central business district.

The offices of Macarthur, the world’s largest producer of pulverized coal used by steelmakers, were among the first to succumb to the waters and a crisis management team is working remotely, said Genevieve Fraser, a spokeswoman. At QR National, Australia’s largest coal transporter by rail, most of the Brisbane team is working at home, said spokesman Mark Hairsine.

Queensland Premier Anna Bligh has made reopening the center of Australia’s third-largest city a priority to kick-start the recovery. From brewer Castlemaine Perkins to retailer Woolworths Ltd., businesses are struggling to receive supplies or dispatch goods after torrents swept east through the state into Brisbane.

“The disruption of our core industrial base will have a big impact on both the state and federal economies,” Caroline Sullivan, associate professor of environmental economics and policy at Southern Cross University, said in an e-mail. The university has campuses in Queensland and New South Wales.

The cost to the nation may reach A$13 billion ($12.9 billion), or 1 percent of gross domestic product, said Stephen Walters, chief economist for Australia at JPMorgan Chase & Co. in Sydney. Michael Turner, a Sydney-based economist at RBC Capital Markets, estimates first-quarter growth would be cut 0.1 percentage point if Brisbane closes for two days.

Sent Home

Even as some residents return home today to start the cleanup, it’s too early to say how long the central business district will be closed, Lord Mayor Campbell Newman said. Swamped office basements need to be pumped dry before building services can be switched back on, he said in an interview on Channel 7.

Macarthur, whose reception flooded and fourth- and fifth- floor offices became inaccessible, normally has 100 people on site, said Fraser. They were all sent home on Jan. 11. At the company’s mines, a return to normal production may take at least a month after some flooding, Chairman Keith De Lacy said this week.

QR National, whose headquarters stayed dry, said yesterday that the Blackwater rail network that feeds into the export port of Gladstone may open next week after flooding closed the track. BHP Billiton Ltd., Rio Tinto Group and Xstrata Plc are among companies that transport coal on the line.

No Brewing

Corporate Queensland faces weeks of disruption as authorities repair bridges, clear roads and reopen ports. About 70 towns and cities in the state have been affected, and some of them will need to be totally rebuilt, according to Bligh.

Goodman Fielder Ltd., Australia’s biggest baker, stopped some production lines for 48 hours. Some customers won’t get supplies until roads reopen and floods subside, it said in a statement today.

Woolworths, Australia’s biggest retailer, has said it’s running “very low” on fresh food including milk, bread, eggs and meat in Queensland as suppliers are cut off by flood waters and staff can’t make it to stores.

Lion Nathan National Foods, Australia’s second-largest brewer and a unit of Kirin Holdings Co., stopped production at its Castlemaine Perkins brewery this week, said James Tait, a spokesman. Castlemaine Perkins, which makes XXXX-brand beer, has been flooded and about 100 pallets of stock damaged, said Tait. No brewing is likely this week or next, he said.

Lion Nathan’s two dairy plants near Brisbane typically receive about 500,000 liters of milk each day for processing and only 10 percent of that is getting through, he said.

Airline Evacuations

Virgin Blue Holdings Ltd., Australia’s second-largest airline, evacuated its headquarters three days ago and shifted 1,000 staff to offices on higher ground in Brisbane. The carrier also assigned some functions to its Sydney office.

Reject Shop Ltd., which runs discount retail stores across Australia, said Jan. 12 it’s assessing the effect of the floods at a distribution center outside Brisbane that services 90 of the group’s 211 stores.

Water levels in Brisbane peaked lower than the 1974 floods, though still hit about 2,500 businesses, Lord Mayor Newman said yesterday. The water might take days to recede, he said.

To contact the reporters on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net; Robert Fenner in Melbourne at rfenner@bloomberg.net; Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net.

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net; Iain Wilson at iwilson2@bloomberg.net.

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