CBH invests in oats

CBH considered building an oats processing plant in Indonesia before opting to invest on home soil and capture value in WA’s reputation for producing clean, green food.

The oats mill will be built at the Metro Grains Centre inJU Forrestfield as CBH expands on last year’s $47 million acquisition of Eastern States-based Blue Lake Milling.

The BLM-run mill will process up to 60,000 tonnes a year and compete for supply with the existing Quaker Oats and UniGrain mills in WA.

The surge in investment in processing WA-grown oats comes as demand for human consumption booms in Asia.

CBH will use the remains of its failed investment in lupin processing and existing storage and container-loading infrastructure to build the mill.

The grower co-operative looked closely at a site on the Sunda Strait in Indonesia for the mill and grain storage facilities.

The site at Cilegon port is near a flour mill owned by CBH and Indonesian billionaire Anthony Salim through their partnership in Interflour.

CBH chairman Wally Newman said the reputation of WA-produced food and the processing expertise demonstrated by BLM at its Bordertown and Dimboola mills tipped the scales in favour of local investment.

“We can do just as efficiently here, or maybe even more so, than if we were in Indonesia and we maintain the Australian brand,” he said.

Mr Newman said CBH hoped to increase its rebate to growers to $10 a tonne within 10 years based on rationalisation of its storage and handling network, returns from investments in downstream processing and other initiatives. “We are not giving a guarantee but that is certainly our objective,” he said.

CBH is focused exclusively on the container export market for quick, rolled and instant oats. It is counting on WA’s reputation for excellence in oats and the phasing out of double-digit import tariffs in Japan andJU China to strengthen trade.

Quaker Oats finished work on its new $20 million mill, also in Forrestfield, late last year while UniGrain has processing facilities in Wagin and Bibra Lake.

CBH expects to have its mill built by the end of next year.