CBH backs eastern exposure
CBH has moved to head off grower concern about its investment strategy by bumping up spending on WA's grain storage and handling network by $55 million to $185 million over the next 12 months.
The CBH board approved the extra spending in the countdown to yesterday's annual meeting where chairman Neil Wandel faced a grilling over speculation it is preparing to invest up to $100 million in NSW.
Mr Wandel said CBH was considering up to six projects as it looked to grow the business, which is set to make a record profit of more than $160 million in 2014 on the back of WA biggest ever grain harvest. He said investment in the Eastern States was one option but the board had not made a final decision and was still doing due diligence.
CBH has been linked with investment in rail and up country storage at Moree, Narrabri and Burren Junction to supply the Newcastle Agri-Terminal, which loaded its first shipment of grain last week.
Influential Lake King farmer Bob Iffla suggested CBH would be better off looking after its own backyard and improving port access at Esperance and Albany.
He also accused Mr Wandel of providing misinformation on the big difference in prices being offered for wheat in the Albany and Geraldton port zones.
Mr Wandel reminded critics of investments outside WA storage and handling that it was important to look beyond the record harvest of 15.8 million tonnes.
He asked how CBH would support its business and customers if the State had consecutive harvests of 6 million tonnes.
CBH chief financial officer David Moroney said the storage and handling division contributed 94 per cent of last year's $131.7 million profit. Mr Moroney said CBH had secured banking facilities of $2 billion at a reduced rate for 2014 to handle the record crop.
He said the State Government had signalled a review of tax exemptions available to CBH because of it co-operative status.
The State was forced to return almost $40 million to CBH last year after a favourable tax ruling.
Quizzed about CBH debt related to the investment in Interflour, Mr Moroney revealed a $US70 million loan taken out in 2005 to purchase a 50 per cent share in the South-East Asian mills had been repaid in full.
CBH chief executive Andy Crane warned growers not to take markets in Asia for granted as rivals stepped up production to meet growing demand.
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