The CBH Group has signed an agreement to take a direct
interest in grain processing via a $A72 million investment in two
of Asia's leading flour millers.
Pacific Agrifoods, The CBH Group's joint venture with
The Salim Group established in April of this year will acquire a
66.7% stake in Interflour, one of Asia's largest flour milling
operations with four flour mills in Malaysia along with a plant and
a grain terminal in Vietnam.
This holding in Interflour is being acquired from
Interpacific Holding, a major Asia-Pacific distributor of
pharmaceutical and healthcare products. Interpacific Holding will
retain a 33.3% interest in Interflour.
As part of this transaction, The CBH Group has taken a
one third interest in the Berdikari Flour Mills of Indonesia, the
world's fourth largest flour miller which when combined with the
Interflour assets, represents around 1.5 million tonnes of
Completion of the acquisitions will proceed with the
finalisation of usual conditions.
CBH Chairman, Robert Sewell said the transactions
provided benefits and cross industry access to all parties.
"This is an important step for Western Australia that
demonstrates CBH's commitment to add value for grain growers," he
"At the moment, growers are only receiving around $200
per tonne for their wheat at the farm gate. The international price
for their product climbs to around 3-4 times that after it is
processed into flour.
"This arrangement provides an exciting opportunity for
WA grain growers to take a share of the grain value chain. Rather
than simply exporting raw commodities, growers now have the
opportunity to capture extra value created through the processing
of their grain."
Mr Sewell said the agreement would provide a greater
degree of surety for the international demand of Australian wheat
by displacing wheat previously supplied from the US, Canada, Indian
Sub-Continent and Europe.
"Western Australia is an export oriented state and
this transaction will allow for a greater guarantee of supply of
Australian wheat via our existing system of wheat marketing to the
international market," he said.
"Growers will now have a closer relationship with the
end user and own a real stake in producing not only the best wheat
in the world but the very best flour as well."
The Salim Group Chief Executive, Mr Anthoni Salim was
"The acquisition of Interflour opens up the
opportunities to create real value for our respective
organisations," he said.
"For example, the Salim Group subsidiary, Indofoods
owns Indonesia's largest flour miller Bogasari, an association with
potential for aligning business interests in a number of areas,
including the acquisition of wheat from Western Australia."
Dr Peter Zuellig, Chairman of Interpacific Holding
said that the sale of a portion of their Interflour assets was a
significant step for the organisation.
"When considering this transaction, we were seeking a
partner that could offer a long term, strategic fit for the
business, someone that could add some real value. Pacific Agrifoods
certainly delivers this."
Mr Sewell agreed. "By turning our key customers into
partners, through transactions like this, we are strengthening the
relationship between international customers and further developing
the market for the growers of Western Australia. This is good for
growers and for the future of the Western Australian and Australian
"It is clearly a win-win situation when the industry
is working together with the common goal of creating increased
value, better grain quality and enhanced quality of final