The CBH Group is pleased to confirm that it will remain a grower
owned and controlled co-operative following the Board's selection
of "Enhanced CBH" as the preferred model for CBH's future
The decision follows assessment of a full spectrum of models and
rigorous evaluation of a short list of three potential co-operative
CBH Group Chairman Neil Wandel said the "Enhanced" co-operative
structure provides the best outcome for WA growers, retaining the
most valuable aspects of CBH's existing structure while allowing
new and innovative enhancements to create further value for
"This model truly puts growers at the centre of our business
while retaining our valuable tax-exempt status," Mr Wandel
"It gives CBH a sustainable, competitive advantage in a
marketplace otherwise crowded by globally-backed competitors driven
by the interests of their shareholders, not the long-term interests
of WA growers."
Mr Wandel said Enhanced CBH will fall within the technical
definition of a Non-Distributing Co-operative under the new WA
"The enhancements we are exploring under this model
include partial refunding of charges to reward growers for their
patronage of our storage and handling network, more investment in
our storage and handling network and the development and rollout of
new products, services and investment instruments that will provide
more value to growers and the industry.
"This structure allows us to return value to members in ways
that the vast majority have asked from their co-operative. These
include keeping storage, handling and freight charges as low as
possible and continuous investment in maintaining and upgrading the
storage and handling network.
"As a Non-Distributing Co-operative, we will also retain
the tax exemption for our storage and handling business - an
exemption valued at an estimated $10-15 million in an average year
and significantly more in bigger harvest years."
Mr Wandel said the proposed Enhanced structure would see the
introduction of a new and modernised constitution and a transition
to the new Western Australian Co-operatives Act, which the Board
anticipates putting to a Member vote later in 2011.
"Over the next few months, CBH will be working to ensure this
model is ready to implement. We are also planning briefings with
our grower members to provide a comprehensive update on CBH's
strategic vision, our new structure and our plans for creating and
returning value in the seasons ahead."
Mr Wandel said the Board was united on the selection of the
Enhanced CBH model and confident it would reinforce CBH's
partnership with growers and ensure the co-operative and its
members grew stronger together.
Growers and the Board, management and employees of CBH could now
move forward with confidence and clarity, knowing the decision was
the outcome of an exhaustive investigation which included
unprecedented consultation with growers, expert evaluation and
"On behalf of the Board, let me be absolutely clear - CBH
is proud to remain a co-operative," Mr Wandel said.
"Our co-operative model has seen us grow from strength to
strength over more than 75 years, reflected in the fact that we are
now Australia's largest co-operative.
"Our research and independent expert advice shows that co-ops
can be equally as successful and globally competitive as corporate
models, provided they adapt to a changing environment and the
different needs of their members. That is what we are doing.
"In the Australian context, there are a number of examples of
grain storage, handling and marketing organisations formerly
controlled by growers which have gone down the demutualisation and
corporatisation path, only to lose their focus on growers and be
taken over by multinational companies seeking to provide returns to
"Many growers in Eastern Australia have since commented that
they are envious of the services and value provided to growers in
WA by CBH, the only remaining grain organisation owned by growers
and which has their interests at heart."
For background information on the Board's decision on the
preferred model for CBH's future structure, please click here.