Historical underinvestment has grain juggernaut CBH scrambling to “play catch-up” as WA harvests get bigger, with plans to roll out $250 million on the network each year for at least the next five years. The $1.25 billion would be the biggest five-year investment in CBH’s extensive network of country sites in the co-operative’s 88-year history. CBH — Australia’s biggest co-operative, grain marketer and grain handler — forked out $254m on bin upgrades in 2020-21, which included adding 270,000 tonnes of permanent storage at its Brookton, Hyden and Dale receival sites. The co-operative then shifted its focus to spending $35 million adding 2.4 million tonnes of emergency storage ahead of starting to receive WA’s record crop, which is expected to reach 22 million tonnes in coming weeks. CBH also completed more than 180 sustaining capital projects in 2020-21, varying from $50,000 to $12 million at a total cost of $109m, to extend the life and capacity of its existing infrastructure. CBH chief executive Ben Macnamara said the co-operative had invested nearly $1 billion in the network during the past five years. He said network investment was likely to continue at similar levels for the next five years to address previous underinvestment and maximise how much grain CBH could get to port quickly during the first half of the year. “The task is getting larger and we will continue to focus on out-loading projects but there is also a requirement to add additional storage to the network,” he said. Mr Macnamara said with the State’s average crop size continuing to grow — the five-year average crop size had increased 60 per cent over the past five years to 14.2 million tonnes — CBH would need to keep investing. He said the spending was needed to meet the requirements of a growing crop size, an ageing receival network and the demands of a narrowing shipping window to capture maximum value for growers’ grain. The new investment would be partly funded by a $2.20 per tonne increase in supply chain fees, split between growers and marketers, with the grower receival fee and exporters port terminal shipping fee bolstered by $1.10 per tonne in June. Charges vary according to grain type but the increase brings these to $29.40/t for wheat, which CBH noted was below 2014 levels and cheaper than its interstate peers. Mr Macnamara said CBH was trying to “strike the right balance between trying to receive the crop and trying to out-turn the crop”. “We are playing some element of catch-up to make sure the network can keep pace to keep up with the growing crop size, and that is why we are spending at elevated levels,” Mr Macnamara said. “Given the likelihood of a large crop, we moved our focus (this year) to making sure we had sufficient storage to deal with that task, spending $35.8 million in approvals and construction of about 2.4 million tonnes of emergency storage at 33 sites across the network. “Adding the 2.4Mt and the 270,000t, you get in the order of 2.7Mt of additional storage this year, which is a fair quantity given the size of the network.” Mr Macnamara said a lot of the sustaining capital projects were focused at CBH ports and through the countryside, and while “a lot of these go unnoticed” they were a “critical part of our investment”. “That is about sustaining the existing asset, not expanding the capacity of it . . . so getting the condition of our network back up,” he said. “In terms of sustaining capital, historically we were spending about one per cent of the total asset replacement value, while industry normal is about 3 per cent.” Mr Macnamara said supply chain challenges, which had caused major delays in getting grain to port on time earlier in the year and cost CBH $17m in demurrage, highlighted the need to focus on dealing with the “increased task”. “A lot of our capital will continue to focus on further out-loading projects,” he said. CBH posted a $133.8 million surplus for the year to September 30, up from $11m the year before, and group revenue of $4 billion. It was CBH’s strongest financial performance in five years.