NEWS FROM YOUR CO-OPERATIVE
>> IN THIS ISSUE
2 Your Network
4 CBH launches new oat processing facility
5 Let DailyGrain OptimiserPlus help to maximise your returns
6 CBH Pool Products
PICKof THE CROP YOUR CBH, YOUR CHOICE A key part of this review process was the recent release of the information booklet for growers, exploring the various options, benefits and trade-offs in relation to potential changes to the structure and governance of the co-operative. The release of this booklet was followed by grower meetings across the state to explore these issues further.
New faces join the GAC
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“CBH has grown and evolved over the past 83 years to meet
Photo competition winners
7 Community Corner
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Earlier this year, CBH engaged consultant experts in accounting, tax and legal to embark on a structure and governance review of the co-operative, to help ensure that any decision on future changes to CBH is in the hands of informed grower members.
CBH Group Chairman, Wally Newman, said the aim is to provide growers with an unbiased information package that provides a good understanding of all the moving pieces of the structure and governance debate, allowing CBH and growers to have an informed discussion about what suits CBH now and into the future.
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the changing needs of our grower members. We have built a strong and efficient supply chain from paddock to processor that delivers value to our growers, keeping them internationally competitive,” Mr Newman said.
worked with the best tax, legal and accounting experts to re-examine our structure and made the decision to remain a non-distributing cooperative, with the enhancement of rebates as a way of returning value to growers.
“In 1971, when CBH was looking to establish the Kwinana Port Terminal, it moved from a distributing co-operative to a non-distributing co-operative, with the advantage of rate and tax exemptions which were used as a way of paying off the loan required for construction of the Terminal. At the time, this purchase was the largest loan transacted in Australia.
“Recently, CBH has conducted a very candid review, again with advice from independent advisors in financial services, co-operative and corporate governance, legal and tax experts, and are now in the process of working with our growers in considering and gathering comprehensive grower feedback.
“Then in 2000, CBH put a restructure proposal to growers to corporatise the co-operative, but this proposal was rejected by growers. “In 2009–10, when the new Cooperatives Act came into place, we
“Structures are very complex topics and, while in the past we’ve not always involved growers in the decision making process from early on in the piece, this time we have endeavoured to make sure growers PTO...
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have all the information before being asked to provide any feedback on the appropriateness of the current model or if changes or tweaks are necessary.
Your Net
“While there are many trade-offs that grower members must consider when looking at our structure, the fundamental trade-off is between ownership and control and how value is generated and returned to the beneficiaries of the various structures. “In terms of governance, the booklet explores a number of elements, including the size and composition of the Board eligibility requirements for Directors how we ensure our Board has the right mix of skills and experience and how Member Director elections are conducted.
“As the owners and sole beneficiaries of the CBH business, this review provides our growers with a critical opportunity to provide input to the Board on the structure and governance of CBH. “I strongly encourage all growers to read this booklet and participate in the member survey. I further encourage you to contact your local Board Member, so that we can hear from you, first hand, your views about the future of CBH.” CBH has engaged an independent survey consultant who will attempt to contact every member in September to determine their preferences. This will assist the Board to form a recommendation for growers in 2017 and a grower vote will subsequently be sought, if required. A copy of the Your CBH, Your Choice — an information booklet on the structure and governance of CBH can be found at www.cbh.com.au/our-review.
Chris Rowlands, CBH’s new Manager Asset Management Group and Chris Atkins, CBH’s new Manager Project Delivery.
In March and April this year, nearly 900 growers attended meetings where CBH outlined its Network Strategy, aimed at improving site turnaround times and tonnes to port, maintaining low fees, and focussing capital and maintenance on the 100 sites of the future. This strategy is a culmination of over two years of analysis, which has included consideration of how we will effectively execute this strategy. What has developed as a result, is a strong focus on the areas of asset management and project delivery. Asset management is the discipline of managing long-term assets, such as those that make up the network, to ensure they are being managed sustainably in order to optimise productivity, risk and compliance. This is an important part of developing a sustainable, reliable and low-cost network for the future. Project delivery is focused on delivering projects that achieve the objectives of the Network Strategy and maximise value through excellence in procurement, engineering, innovation, project management and capital efficiency. It is about delivering the enhancements, expansion and major maintenance projects required to bring the Network Strategy to life, on time and on budget. Earlier this year, CBH recruited two of the best in the fields of asset management
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and project delivery to help successfully implement the Network Strategy and deliver better service and value to growers now and into the future.
MEET CHRIS AND CHRIS — HELPING TO BUILD AND MANAGE YOUR NETWORK Chris Rowlands (CR) and Chris Atkins (CA) recently joined the CBH team in the roles of Manager Asset Management Group and Manager Project Delivery Group respectively. We spoke to the two Chris’ about their new roles and the key projects they’ll be focussed on over the next 12 months.
Q Can you tell us a bit about your background and previous experience? CR: I’ve been involved in project management, engineering and asset management for 27 years now, across Western Australia (WA), Europe and the UK. Prior to moving to WA eight years ago, I led many projects across Europe to implement new infrastructure and high volume manufacturing lines for the automotive industry. Since arriving in WA, I’ve worked with FMG, Barrick Gold, BHP Billiton Iron Ore and WSP-Parsons Brinckerhoff in a number of related roles. CA: My professional career across the last 20 plus years has been focused primarily in the areas of engineering and project management, as part of the development and delivery of key infrastructure programs across different industries, including oil and gas, telecommunications and mining and mineral processing. I have been based in
work WA 11 years and have previously worked at Bechtel, Rio Tinto and BHP Billiton Iron Ore — where Chris and I worked together on a number of projects.
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Q What are the key projects you will be focusing on over the next 12 months? CR: My main focus has been on understanding how CBH operates and getting a feel for the condition of our major assets and the work required to sustain them to the safe and optimal performance level we require for the future. As you can imagine, this is quite a big undertaking and will be the primary focus for me and my team over the next 6–12 months. From there, we will be able to develop a more comprehensive approach to planning maintenance and capital projects that we need to focus on in the future, in line with CBH’s Network Strategy. CA: My focus is on developing and delivering on the larger maintenance and capital projects that are identified by the Network Strategy and Chris’ Asset Management team as the priorities for CBH. My team’s role is to make sure that we are utilising the in-house knowledge and understanding of our infrastructure to deliver the safest, bestin-class and most cost-effective solutions to meet the needs of the business.
Q What will be the major benefits for growers? CR: The major benefit I see will be a more planned and well executed approach to maintenance and asset management, which will hopefully result in a network that is more efficient and effective and can provide improved turnaround times for growers at harvest. CA: I think what both my team and Chris’ team can collaboratively deliver is a greater focus on ensuring we spend the right amount of money to maintain the right assets at the right level of performance and safety standards in order to deliver the best outcomes for both the CBH network and its growers. Quite simply, our job is to help develop and sustain the network and its performance now and for future generations of grain growers.
New weighbridges: 1 Beacon; 2 Cunderdin; and 3 Mirambeena — nearing completion.
CBH is making changes to how we do business in the following areas and those changes will occur throughout 2016 and 2017. In the meantime, we are getting on with the job of implementing the Network Strategy and preparing for the coming harvest. In anticipation of a large harvest, we are building almost 800,000 tonnes of additional harvest storage at Shark Lake, Gairdner, Hyden, Narrakine, Wickepin, Bulyee, York, Bruce Rock, Merredin, Dulyabin, Mukinbudin, McLevie, Beacon, Konnongorring and Moora. Below is a brief look at some of the additional improvements we’ve already made to some of our existing sites, in readiness for the 2016–17 harvest.
CUNDERDIN Work is under way to deliver improved site design and allow for further expansion in coming years. This includes a new sample shed, which includes two hydraulic sampling spears and associated testing equipment, intended to reduce sampling times and improve operational efficiency. Traffic flow at the site will also improve with a new marshalling area, improved site entrance access and new 36 metre entry and exit weighbridges.
WAGIN An extra open bulk head is being built to provide more storage in time for harvest. In addition, improved equipment at the site on existing storage will provide quicker turnaround and throughput times.
DUMBLEYUNG Improved equipment at the site on existing storage will provide quicker turnaround and throughput times.
MERREDIN An extra open bulk head is being built to provide more storage in time for harvest.
BEACON The existing sample hut has been relocated further into the site and a new 36 metre weighbridge has been installed.
ALBANY Improvements will be made in the September shutdown to the process for transferring grain from the trains to the conveyor for loading ships, which will improve the service for growers and customers.
MIRAMBEENA Despite heavy rain in the area slowing construction throughout the year, the new Mirambeena site, located just outside Albany, is progressing to completion with commissioning activities to commence in late September. The site will offer an additional 140,000 tonnes of grain storage to improve services to growers and customers in the Albany Zone.
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04 | CBH GROUP
CBH launches new oat processing facility in Forrestfield CBH Group Chairman, Wally Newman said that the expansion provides further opportunities to improve returns to the cooperative, increase rebates to growers and strengthen the demand for WA oats. “It’s an opportune time for the co-operative as we leverage BLM’s expertise in this area, with the location of CBH’s Metro Grain Centre already providing all the necessary grain handling infrastructure and container loading facilities required for a project of this scale,” Mr Newman said.
BLM CEO Ben Abbot, CBH Chairman Wally Newman and Minister for Regional Development; Lands; Minister Assisting the Minister for State Development, the Hon Terry Redman MLA, at the site of the proposed new oat processing facility in Forrestfield.
CBH has expanded its investment in oat processing, unveiling plans to build a modern day oat processing facility at the Metro Grain Centre in Forrestfield.
The investment builds on last year’s acquisition of Blue Lake Milling (BLM), one of Australia’s largest suppliers of processed oats. The new facility will be the third plant operated by BLM, adding to its South Australian and Victorian processing plants.
CBH expands lime sand supply for growers Following a successful trial, the CBH Group will offer a lime sand service to growers in the south-west of Western Australia, providing a stockpile of lime sand at CBH’s Narrakine and Lake Grace receival sites. CBH Group Commercial Manager for Operations, Andrew Mencshelyi said growers in the area will have easy access to lime sand, saving them time and money.
Food Western Australia indicates that the annual use of lime is 40 per cent below the estimated amount required to effectively treat soil acidity, indicating there is an opportunity to increase lime usage.
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“The new Western Australian plant will enable the BLM business to increase its ability to service the growing Asian demand for oat products, using locally grown oats.” Construction of the plant will begin early next year and is scheduled for completion in December 2017.
goes online
“We’ll continue to source the product through Aglime in Lancelin, back hauling with our normal grain movements through to the metro area,” Mr Mencshelyi said. Limited tonnes are available and orders can be placed by contacting the CBH Grower Service Centre on 1800 199 083.
“As a co-operative, we are always looking for opportunities that will positively impact on the profitability of WA grain growers,” Mr Mencshelyi said. The use of lime is a key measure to combat soil acidity which impacts on crop production and profitability. Research from the Department of Agriculture and
“Once complete, the new processing facility will make BLM the largest independent oat processor in the Australasian region.
The new CBH Fertiliser website is now available to provide you with quotes online, product information and pick up and contracting information. Visit CBH Fertiliser today at www.cbhfertiliser.com.au
Image supplied courtesy of the Department of Agriculture and Food, Western Australia
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DailyGrain is offering growers the opportunity to access its innovative OptimiserPlus product for this harvest.
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LET DAILYGRAIN OPTIMISERPLUS HELP TO MAXIMISE YOUR RETURNS
OptimiserPlus is the first product to integrate both Contract Allocation and CBH Quality Optimisation, providing a convenient, time saving tool that gives growers peace of mind that they are getting the best value for their wheat. DailyGrain’s Product Co-ordinator, Lauren Taylor said that DailyGrain aims to give growers the tools to carry out their grain marketing with confidence and OptimiserPlus is a great example of this.
“Working out the best way to allocate loads to multigrade contracts with different spreads and nominating to pools with different quality rewards can be a complex and time consuming process,” Ms Taylor said. “OptimiserPlus takes the hassle out of this process by evaluating load quality, existing contracts, cash and pool prices and calculating the optimal way to blend and allocate loads for the maximum returns, all in one place. Growers receive a detailed report of their results on screen, which can be exported to Excel or as a PDF document. “The allocation solution is then prepopulated in the DailyGrain nomination screen, so nominating to your contracts is as easy as pressing a button. “The program can be run as many times as desired and is not dependant on how many tonnes or contracts you have.” OptimiserPlus is available to DailyGrain’s Premium members at a cost of $650 plus GST. Premium memberships to DailyGrain are available for $350 plus GST. For more information, or to sign up today, contact DailyGrain on (08) 9416 6244, visit www.dailygrain.com.au or email info@ dailygrain.com.au
Maximise your returns with OptimiserPLUS. The easy way to blend and allocate your loads for the best possible return. DailyGrain introduces OptimiserPLUS, the most innovative new product for Western Australian wheat growers. OptimiserPLUS is the first product to integrate both Contract Allocation and CBH Quality Optimisation. That means it’s never been easier to realise the full potential of your harvest!
NOW AVAILABLE DIRECT TO GROWERS
FLAT FEE $650 +GST
OptimiserPLUS is available now to Premium DailyGrain members. Not a member? No problem. Simply sign up today and you can be confident you’re making the most of the upcoming harvest. To purchase OptimiserPLUS today, visit dailygrain.com.au
For more information, visit dailygrain.com.au or phone (08) 9416 6244.
Harvest Guides on their way Keep an eye out for your Operations Harvest Guide and Grain Marketing Guide, which provide all the information you need to know about delivering to CBH sites and marketing your grain with us this harvest.
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CBH Pool Products:
diversify your product mix for results LUPIN POOL 2014/15
420 400
BY PAUL SMITH, STRUCTURE COMMODITY PRODUCTS MANAGER, CBH GROUP
Additionally, by participating in a CBH pool product, you access the largest export program in Australia and over 80 years of experience managing supply chains, providing the best possible access to market intelligence, customer relationships and arbitrage opportunities as they arise. A number of CBH pool products have performed extremely strongly over the past 12 months, illustrating the advantage of having a dedicated team of grain trading and marketing professionals working to achieve the best value for your grain. Our 2014–15 Lupin Pool achieved a record high final equity of $395.95 FIS KWI. As can be seen below, this outcome was above the best available cash prices over the lifetime of the product. SPRING 2016
Value ($)
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FIGURE 1 CBH LUPIN POOL PRICE VS CASH PRICE 2014–15
WHEAT PROTECTION PLUS POOL 2015/16
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PROPLUS
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Best Cash
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CBH pool products offer a great opportunity to diversify your marketing program, while also broadening your window of opportunity to allow for Date potential improvement in grain market pricing.
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the full range of products available to assist you to market your grain. One thing has become very clear in recent seasons:- it is Lupin Pool impossible to predict ahead of time which style of product will perform best in any given season. For this reason, it is important to utilise a variety of products with different Best Cash time-frames and risk profiles in order to achieve a more consistent result over time.
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PIN POOLWith 2014/15 this in mind, it is important to consider
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While high yields will hopefully eventuate for many growers this year, the current low level of cash prices mean it is critically important to extract as much value as possible out of your hard-earned grain assets.
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Value ($)
With the 2016–17 growing season shaping up very well for many growers across the state, attention will start to turn towards re-affirming your grain marketing approach for this season.
Lupin Pool
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FIGURE 2 WHEAT PROTECTION PLUS POOL 2015–16 The final equity for the 2015–16 Wheat Protection Plus Pool was $315.79 FIS KWI for APW1 before quality. The quality payment for zone-average APW1 in Kwinana was $5.60, meaning a grower delivering average quality APW1 to the pool received a final equity of $321.39. This was well in excess of the pool protection level of $300, and significantly better than the prevailing cash prices over the lifetime of the product. The final equity for the 2015–16 Wheat Accelerator pool was $299.07 FIS KWI, for APW1 before quality increments, and a grower delivering average quality APW1 in Kwinana received a final equity of $304.67 FIS.
The Accelerator Pool result compares very favourably with cash prices available over the product lifecycle, which were rarely above $300 over the marketing window and fell to as low as $250 recently, while spending the majority of the time between $270–290/mt. These results illustrate the potential value of incorporating multiple products into your grain marketing plan, in order to achieve a more consistent outcome year after year. Reduce your risk and maximise your potential by incorporating CBH pools into your 2016–17 season marketing plan. For further information on CBH pool products, contact your local CBH Business Relationship Manager.
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Photo competition winners
BEST PHOTOGRAPH WINNER
Congratulations to this year’s winners of the CBH Photo Competition, themed “A place to grow.” BEST PHOTOGRAPH WINNER The sheep yard – Richard Poulish
RUNNER-UP Don’t get your shoes muddy! – Debbie Daniels
Debbie Daniels — Don’t get your shoes muddy! Richard Poulish — The sheep yard
SEEDLINGS (5–12 YEARS OLD) WINNER Standing out from the crowd – Aaron Schilling
PEOPLE’S CHOICE AWARD (ANNOUNCED 9 SEPT) WINNER Three generations – Sue Brown Aaron Schilling — Standing out from
New faces join the GAC CBH’s Growers Advisory Council (GAC) recently welcomed four new members to the team. The new members include Frank Panizza from Toodyay, Andrew Nixon from Moora, Natalia Browning from Kondinin and Bill Bailey from Jerramungup.
the crowd
Sue Brown — Three generations
Members of CBH’s Growers Advisory Council. Back (L-R): Bill Bailey, Brendon Williamson, Frank Panizza, Andrew Todd (Chairman), Ashley Wiese, Darrin Lee, Digby Willmott, Jim Heal; Middle (L-R): David Cox, Andrew Nixon; Front (L-R): Michael O’Callaghan, Jeff Seaby, Natalie Browning, Royce Taylor, Michelle Barrett (Deputy Chairman), Linda Hewson, Neville McDonald; Absent: David Slade and Barry West.
Michelle Barrett from Munglinup and Michael O’Callaghan from Marchagee were both successful in renominating and will remain on the GAC for another term. Outgoing Councillors include Brendon Williamson from Bruce Rock, Darrin Lee from Mingenew and Ashley Wiese from Narrogin, all of whom have made a
significant contribution to the GAC over a number of years. Members are appointed for a 3 year term, with nominations to join the Growers Advisory Council open each year in February.
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Community Ravensthorpe provides blank canvas for renowned street artist The CBH Group’s silos in Ravensthorpe have been transformed by world-class street artist, Amok Island, as part of a street art initiative with not-for-profit organisation FORM. FORM facilitates a program called PUBLIC, bringing the world’s best known street artists to Western Australia to paint laneways, walls and public spaces. This is the second year of partnership between FORM and the CBH Group.
This initiative forms part of CBH’s Community Investment Program, which invests around $1.5 million each year into projects to support rural and regional communities through sport, cultural events and services.
Visit us at the Perth Royal Show CBH will again be showcasing the fine art of grain sampling in the Farm 2 Food pavilion at this year’s Perth Royal Show, held from 24 September to 1 October. The interactive CBH display allows children to have a go at the sampling process while touching the grain and using the equipment. You can also come and see our model train in action, loading and unloading canola in the Farm Technology pavilion. If you’re visiting the Royal Show this year, be sure to pop in and say hi!
Musica Viva entertains at Mingenew Students from Mingenew Primary School were recently given the gift of music when CBH Director, Rod Madden, presented the school with a set of percussion instruments, as part of CBH’s partnership with Musica Viva. The presentation coincided with a visit from Perth Musician, Mark Turner, who visited the school and ran a workshop with the students. CBH is now in its third year as the Equal Music Wheatbelt Partner for Musica Viva, which helps to subsidise the cost of Musica Viva’s In Schools Program and bring music to classrooms across the wheatbelt. The partnership will see 56 concerts take place in schools across WA’s grain growing communities this year, including upcoming concerts in Geraldton throughout October. For more information visit www.musicaviva.com.au
Students from Mingenew Primary enjoying some of the instruments on hand through Musica Viva’s In Schools program, partnered by CBH.
Please submit your story ideas to: The Editor Corporate Affairs, CBH Group 30 Delhi Street, West Perth WA 6005
T (08) 9416 6212 F (08) 9322 3942 E nicole.penter@cbh.com.au
cbh.com.au
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