From the commencement of settlement of the Maroochy district, sugar cane growing was seen as a cash crop eminently suited to the area. Indeed, the first cane had been planted at Bli Bli as early as 1867. In the final decades of the nineteenth century, cane was beginning to be grown in quantity all along the coastal areas of Queensland and northern New South Wales, and mills needed to be built to crush the crop and extract the sugar. By 1880 sugar mills had been established in many of these areas, such as at Harwood (1870), Pleystowe (1872), Macknade (1874), Rocky Point (1878) and Condong (1880).

During the 1880s, there was a great enthusiasm for the setting up of new mills, and in that decade mills were established at Broadwater (1881), Fairymead and Millaquin (both 1882), Hambledon, Victoria, Marian and Farleigh (all 1883), Mourilyan , Pioneer and Kalamia (all 1884), Bingera (1885), and Racecourse and North Eton (both 1888).

In the Sunshine Coast hinterland, one of the areas most favoured for the crop was the district of Dulong, eight kilometres west of Nambour. The area was largely covered with dense vine scrub and some dense rain forest, but most of the heavy timbers had gone by 1890. The loggers had left the area crisscrossed with access tracks for the area had been logged in the previous decade. A government survey in 1894 claimed that about seven square miles or eighteen square kilometres of land were suitable for the growing of cane. The idea that Dulong was a good cane-growing area persisted for a decade or more before rapid soil degradation and poor crops proved it wrong.

To foster development of the new sugar industry, the Queensland Government passed the Sugar Works Guarantee Act in 1893, which provided financial assistance to farmers in setting up local sugar mills. Firstly, the farmers had to form an incorporated company, and then they could apply for a loan from the Treasury. To guarantee the loan, the company had to arrange for the farmers to mortgage their lands to the company through a specified bank. The deeds would be in the hands of the Government for the duration of the loan, which had to be redeemed in full by the end of fifteen years.

In the light of this new Sugar Works Guarantee Act, local farmers began to discuss construction of sugar mills at Yandina, Petrie's Creek and Dulong. It was thought that cane would be particularly suitable for growing in the Perwillowen, Burnside, Rosemount, Woombye, Palmwoods, Image Flat, Yandina, and Eumundi districts, so on 19th August 1894, a meeting of 120 persons decided to form the Moreton Central Sugar Mill Company Limited, in order to construct a mill to crush sugar cane locally.

Because of its central position, the Mill would be built in the little town of Nambour (population 200 at the time), this site having an added advantage in that it was served by the North Coast Railway, which had reached the town four years previously. This would enable cane from as far north as Cooran and as far south as Landsborough to be transported to the mill by the Queensland Railways. The mill was estimated to cost 36 000 pounds, and three provisional directors, John Currie (Chairman), George L. Bury (Secretary) and John A. Low were appointed to expedite the project.

Later that same week, a similar meeting was held to set up the Dulong Central Sugar Mill Company, the aim being to build a sugar mill near the site of the present-day Shamley Heath estate, some 10 kilometres to the west of Nambour. This position was chosen as it was adjacent to the south arm of the Maroochy River. It would be necessary to place a small weir across the river to create a pond, from which it was hoped to obtain an adequate supply of water for the mill's boilers and sugar processing works. It is interesting that some of the farmers were having 'two bob each way', being associated with both proposed sugar mills. Indeed, John Currie and George Bury were directors of both the Dulong Central Sugar Mill Company and the Moreton Central Sugar Mill Company.

The need to transport the processed sugar for six miles from the proposed Dulong mill to the nearest railway station at Nambour caused some concerns, because of the difficulty in negotiating the steep Dalzell's Pinches (two sections of road climbing the Highworth Range with gradients of 1 in 4). It was thought that this problem could be overcome by installing a cable tramway or aerial flying foxes down the steep slopes.

An application to the Government for a loan of 12 000 pounds to build the mill was made, and the Treasury indicated that the funds would be made available. In the light of this, George Bury promised to supply enough cane plants for 400 acres, and the farmers at Dulong began work on clearing the thick vine scrub and patches of rain forest.

The Dulong mill proponents probably never appreciated the major difficulties they would face in trying to establish a sugar mill at Dulong. Transportation of the boiler, steam engine, heavy crushing machinery and associated equipment from Nambour up Dalzell's Pinches to Dulong would have been impossible at the time. An alternative route was considered via Yandina and then following the South Maroochy River valley upstream, but that country is very rugged with rocky gorges and the high Kureelpa Falls as a major impediment.

No records have been found to show that the elementary problems inherent with the Dulong Mill site were ever seriously examined. In any case, they did not eventuate for when the time came for the farmers to actually mortgage their farms and hand over their Deeds, many reneged on past promises, and not enough would comply. The project lapsed, and the Dulong Central Sugar Mill Company was struck off the Company Register in January 1897. It is possible that the Directors knew in advance that this would be the likely outcome, and were promoting the Dulong proposal as 'a sprat to catch a mackerel', that is, using the Dulong Mill's anticipated failure to improve the chances of success of the Moreton Mill Company, of which they also were Directors.

Down in Nambour, the farmers also needed to mortgage their properties to guarantee the Government loan for the Moreton Mill, but in that case there were enough of them in agreement to fulfil the Treasury requirements. By handing over the Deeds of their farms, they were automatically made shareholders in the Company and later, after it was built, in the Mill itself.

The land for the mill site was purchased in December 1895, and in the first half of 1896 the area was cleared of trees, stumps and undergrowth. Construction of the Mill itself began at once, a team of at least 27 men being employed to erect the main building, which was 130 feet long, 48 feet wide and 34 feet high. 500 tons of mill machinery had been ordered from Smith's works in Glasgow. It arrived in Brisbane on the Andora, and was transported to Nambour by train. By September 1896 the completed sugar crushing plant had been installed in the partly-constructed mill building, and work could resume in completing the building. The machinery was said to be of the 'latest type', and could work continuously to make 2500 tons of raw sugar in a crushing season of four months. Everything was on track for the Mill to begin its first crush in time for the 1897 season.