28/06/2016 - 14:59

CBH chases Asian oats market

28/06/2016 - 14:59

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CBH chases Asian oats market
CBH chairman Wally Newman (left), Minister for Regional Development Terry Redman, CBH director Trevor Badger and deputy chairman Vern Dempster at the announcement this morning.

A processing plant to produce 60,000 tonnes of oats per year will be built in Forrestfield as part of CBH Group’s expansion into milling.

It follows the grain handler’s acquisition of east coast focused Blue Lake Milling in June last year.

That company produces 60,000t of oats, flours and cereals in two plants in South Australia and Victoria, while the latest planned operation will be focused on both the local and Asian export markets.

The exact value of the investment is commercially in confidence, although Business News understands it will be in the tens of millions of dollars.

Construction will begin this year at CBH’s existing Metro Grain Centre site and is scheduled for completion in December 2017.

CBH Group chairman Wally Newman said the project would build on the Blue Lake acquisition.

“This investment grows our oat processing business to improve returns to the cooperative, increase rebates to growers and strengthen demand for Western Australian oats,” he said.

“Through the investment in Blue Lake Milling we have acquired the skills and capability to further grow Australian oat processing and fulfil the growing export demand.

“It’s an opportune time for the co-operative as we leverage Blue Lake’s expertise in this area with the location of the CBH Metro Grain Centre already providing all the necessary grain handling infrastructure and container loading facilities required for a project of this scale.”

Blue Lake will operate the plant.

Agri action

Earlier this year, the Australian Grains Champion consortium, underpinned by Sydney-based Grains Corp, put forward a bid to acquire and list CBH, which currently operates as a cooperative.

That acquisition would’ve been valued at more than $1 billion, but was blocked by the CBH board, although it committed to a structural review.

CBH represents about 4,200 grower members.

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