CBH tipped to lead

A DECADE ago Australia had 15 major grain handling and marketing organisations.

There are now just five such bodies, and former Grain Pool chief executive Peter Reading believes the number will get even smaller.

Mr Reading played his part in the industry rationalisation by guiding the Grain Pool of WA into its merger with Cooperative Bulk Handling.

After 12 months helping to bed down the merger, Mr Reading will soon be heading to Canberra to run the Grains Research and Development Corporation.

As he looks back on an eventful two-and-a-half years running the Grain Pool, Mr Reading believes CBH is “incredibly well placed” to be one of the major players in the grains industry.

He said the industry had been through a frenzy of activity and expects more mergers and alliances.

“With Grain Corp taking over Grainco, the east coast has almost sorted itself out,” Mr Reading said.

“The west is now basically sorted out, with the merger of CBH and the Grain Pool.

“In the middle, which is appropriately called the middle east, ABB and Ausbulk have been not really getting along, so they have to work out what they want to do.

“And over the top of all that you’ve got AWB.

“So that’s the way the industry is looking at the moment, but there is probably a couple more to happen yet.”

Mr Reading said CBH should seek to establish closer ties with South Australia.

“They should be talking to South Australia. If you look at the two States, they have the great strength, they’re mostly export,” he said.

“The other thing they [CBH] have got to look at is getting global size.

“If you combine South Australia and Western Australia, it would be very powerful.”

Mr Reading suggested a good start would be a marketing alliance similar to Grain Australia, which was formed by the Grain Pool and ABB to market barley.

“I think that would be a very logical step.”

Mr Reading said the merger of CBH and the Grain Pool has proceeded better than he had expected.

“I think its worked very well; it’s ahead of its milestones,” he said. “I thought we would have more difficulties than we did, in terms of settling down, having different cultures.”

Mr Reading expects the next significant change for WA grain farmers will be a “limited partnership” between the farmer-owned CBH and shareholder-owned AWB.

This could be in the form of jointly negotiated contracts with service providers, such as road and rail freight providers.

“All the rationalisation that is going on, at the end of the day it’s all for control of the supply chain,” Mr Reading said.

“That opens up tremendous areas in terms of cost savings, improved operating efficiencies and value adding.

“The issue then is who gets those benefits, that’s what the debate is.”

He said integrated handling and marketing authorities would also be well placed to service more demanding consumers.

Looking ahead, Mr Reading questions the future of the WA Farmers Federation and the Pastoralists & Graziers Association.

“What is the relevance of the two grower organisations?

“They are so completely opposed to each other it’s sad.

“It’s attack before there is even any logical debate.”