Mackay Sugar is seeking to merger with the Proserpine Cooperative Mill, just days after Mackay shareholders endorsed the board's proposal to move from a cooperative structure to that of an unlisted public company.

Some 84.8pc of Mackay shareholders this week voted in favour of the change, which Mackay Sugar chairman Eddie Westcott said would give the board more flexibility and choice in exploring avenues to improve the business.

"The new structure is a crucial first step in enabling us to begin the long journey needed to take Mackay Sugar into the future," Mr Westcott said.

It seems those moves have already begun, with reports today that Mackay Sugar is looking to merge with the Proserpine Cooperative, but such a move will again require the approval of shareholders.

However, Primary Industries Minister, Tim Mulherin, has welcomed the merger, saying it is a very practical and obvious solution to help strengthen the sugar industry in the central region.

"In my view, the industry must continue to consolidate," he said.

"The milling sector will lead the way in diversification so a larger, stronger milling group in the central region will be a benefit to farmers, harvester operators, mill staff and employees.

"Proserpine and Mackay have already started on diversification processes with involvement in refining and furfural plus the proposed cogeneration project at Racecourse Mill."

The merger would consolidate Mackay's sugar operations, but Mr Westcott said earlier this week the board was well aware that the future of the sugar industry lies in diversifying its income stream away from sole reliance on raw sugar.