CBH Group seeks structural change

West Perth-based grain organisation CBH Group is investigating a structural overhaul to provide better returning value for its 4,500 members.

The grower-owned co-operative has commissioned an independent group to conduct an investigation into the best possible structures; a move chairman Neil Wandel says has been 10 years in the making.

Speaking to 720 ABC Perth, today, Mr Wandel said CBH will seek the thoughts from growers into what the best structure for CBH is, but said the mooted change "had nothing to do with corporatisation".

He said the industry had changed significantly in recent times with the liberalisation of wheat exports and recent industry consolidation, adding that the cost of the investigation would be considerable because of its importance of the issue.

"We are very mindful that we need to get this right," he told 720 ABC.

"In addition, our own shareholders have been telling us they want CBH to demonstrate better ways of capturing, providing or returning value to them.

"Addressing the matter of structure has always been on the agenda for the board. What we have formalised today is a process that will ensure we get the best outcome for our shareholders.

"This process will be undertaken throughout 2010 and will commence in January with some extensive consultation work with our grower shareholders on how value should be returned now and in the future.

"To achieve a successful outcome, we must ensure the priorities from our members are central to our considerations.

"The board will take the information from this consultation and begin to work through a process of detailed assessment of potential structures, including the current structure, before bringing a preferred model to shareholders."

CBH Group this week appointed David Willis to its board as a director and will begin March 30, 2010. Mr Willis will replace Ken Palmer who will retire as a director following 17 years on the boards of the CBH Group and the Grain Pool of Western Australia.
Diane Smith-Gander will replace Lloyd Guthrey on the board, who has given early notice of his intention to retire next year after 16 years on the boards of the CBH Group and the Grain Pool of Western Australia.

Mr Wandel said the board, and its new additions, was unanimous in its belief that a range of structural models, including the current structure, should be considered before selecting the most appropriate model to ensure the CBH Group remains competitive and flexible.

In mid-2007, the group sent two directors around to world to assess the structures of similar organisations.

Since its inception more than 75 years ago, CBH has evolved with the industry.

A defining moment for the co-operative was the merger in 2002 of Co-operative Bulk Handling with fellow grower-controlled grain marketing organisation, the Grain Pool of Western Australia.

This began the transformation of the company into an integrated business focused on delivering growers a greater share of the grain value chain.

CBH has since grown to have strategic investments along the value chain including the Interflour flour milling joint venture in South East Asia.

Mr Wandel said the proposed structural change is to give growers more control of their product from the farm gate to the market place and in the process create and capture more value for them.