CBH Plans $1 Billion Reshaping of its Network

In order to remain internationally competitive, Australia’s CBH is planning to spend $1 billion to reshape its Western Australian storage and handling network.

CBH figures indicate that 110 of its sites receive only 12% of the grain harvested, while the co-operative’s maintenance costs across its network have increased from $43 million to $93 million over the past three years. Considering these facts, it seems likely that out of CBH’s 198 receival sites across the Wheatbelt, many will be shuttered over the next five to fifteen years. However, CBH operations manager, David Capper notes that the cooperative will be guided in its actions by its 4,200 grower-owners.

To streamline its network, CBH will fund the investment of $200 million per year through 2020 out of retained earnings, future earnings, and through assuming some long-term debt, to increase throughput capacity, replace storage infrastructure and to complete needed upgrades.

CBH plans to expand capacity over the coming few years to move 2.2 million tons of grain to port per month during periods of highest overseas demand, and plans to increase the volumes of grain that growers deliver directly to its terminals at the port of Geraldton, Kwinana, Albany, and Esperance.

Via what method the grain is transported to these points remains uncertain as rail negotiations continue with Brookfield Rail regarding long-term rail access, however, CBH states it would consider beefing up its fleet of locomotives and wagons, or shift more grain transportation to trucks if the question of rail access continues.