,CBH to slash network by half
CBH has revealed detailed plans to cut its vast grain receival network in country WA from 202 sites to 100.
The giant co-operative unveiled the “100 sites of the future” to growers at a meeting in Northam yesterday where it also discussed the board’s rejection of a corporatisation proposal from Australian Grains Champion.
The 102 sites that are not part of CBH’s future were categorised as having three, five or 10 years of useful life remaining. No money will be spent on the sites as they are phased out.
CBH said its $750 million network restructure over the next five years would focus on the 100 sites that received 92 per cent of the 2015-16 harvest from its 4145 grower members.
The presentation to yesterday’s meeting included a map of the locations where CBH will and won’t invest. Growers in other parts of the Wheatbelt will see the same presentation over the next few weeks.
CBH chief executive Andy Crane said growers had been asking for certainty on its plans for network consolidation, which have been formulated over the past two years but remained shrouded in secrecy during recent elections for grower directors.
“We have been very specific today,” he said. “We had some good discussion with growers and the vast majority of views are ... ‘bring us clarity over the sites that are going to open and the ones that are going to gradually close over a period of 10 years’. That far outweighs any concerns about closure of sites. Growers have moved to a position of wanting certainty over the plans so they can adjust their businesses accordingly and so that local shires can manage that transition as well.”
CBH will continue to use some of the 102 surplus sites in the event of bumper harvests. The bulkhead pads at the sites are not expected to deteriorate for many years. CBH said it was open to discussions with shires and others about alternative uses for its huge storage sheds.
The network strategy aims to increase the speed of receivals at peak harvest times while keeping storage and handing charges at 2013 levels in real terms. CBH also wants to be able to get 2.2 million tonnes of grain a month out of its four port terminals.
Dr Crane said CBH was genuine about about putting every business structure option from “staying a non-distributing co-operative through to a full public listing” to growers over the next six months. Depending on grower feedback, that could lead to a vote on structural change early next year.
AGC said it would continue to campaign for a vote on its GrainCorp-backed proposal to turn CBH into a publicly listed company.
100The number of CBH grain receival sites that will survive
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