CBH Group delivers $16 million Operations rebate
The CBH Group will provide Western Australian growers a rebate totalling $16 million or $1 per tonne from the 2018/19 season.
The rebate delivered by CBH Operations follows the $4 per tonne reduction in supply chain fees announced last year for the 2018/19 harvest.
CBH Marketing and Trading will not return a rebate to growers that sold to the co-operative this year following a tough trading year.
CBH Chairman Wally Newman said that since the Grower Patronage Rebate program begun, CBH had returned more than $440 million to growers while continuing to deliver a significant capital investment program.
“We’ve made our largest ever investment in our network this year, spending approximately $240 million on network capital and maintenance, including approximately 1.08 million tonnes of new storage as well as throughput enhancements to improve our site turnaround times during harvest,” he said.
“Last year, we made the decision to reduce supply chain fees by $4 per tonne, equivalent to $66 million, for the 2018/19 harvest and we have held those fees flat this year, helping our growers to remain competitive in the global market.
“CBH’s storage and handling costs remain the lowest in Australia and we are committed to ensuring that this remains into the future.”
CBH Chief Executive Officer Jimmy Wilson said significant disruptions in international grain markets had impacted all Australian grain trading businesses including CBH Marketing and Trading.
The challenges include the ongoing Chinese anti-dumping investigation into Australian barley, the prolonged drought in eastern Australia, which increased grain values during harvest and that then retreated when wheat was imported into Australia from Canada, as well as the increasingly strong competition from the Black Sea region into key contestable markets.
“Grain prices have been in a steady decline since the 2018/19 harvest, where they reached record prices as a result of the drought in eastern Australia,” Mr Wilson said.
“While Western Australian growers have benefitted from the high grain prices, the compounding events have impacted Marketing and Trading’s ability to make a profit this year.
“CBH’s ongoing financial position remains strong and the forecast loss from the Marketing and Trading division will not impact the Group or future planned capital expenditure on the Western Australian network.”
There will be no Investment rebate for growers this year. CBH’s oat processing business Blue Lake Milling is reinvesting capital into maintenance and upgrades at its Forrestfield facility, and Interflour did not return a dividend to CBH this year.