CBH Group updates 2020 network investment
25 May 2020
The CBH Group today provides an update on our 2020 storage expansion projects.
Since the start of the COVID-19 pandemic, CBH has implemented a range of precautionary measures to reduce the spread of the virus while seeking to minimise potential disruptions to the supply chain.
As a result, our supply chain has operated well with exports increasing over the COVID-19 effected months in comparison to last year.
CBH Chief Executive Officer Jimmy Wilson said that since 2017, CBH has accelerated the delivery of network projects.
“During this time, we have added 2.2 million tonnes of permanent storage to the network and deployed 62 throughput enhancement projects, which is more than has been added in the preceding seven years,” Mr Wilson said.
Mr Wilson added that since the start of the COVID-19 pandemic, CBH has been closely monitoring the impacts on planned network investment for this year.
“Given the uncertainty created by the COVID-19 pandemic, which immediately followed the smaller harvest in 2019-20, CBH has reviewed the delivery of our 2020 network investment,” Mr Wilson said.
“While we are in a good financial position, the virus continues to have a significant impact on the broader economy including on our customers, suppliers and financial markets.
“We need to ensure we take a prudent approach in this environment so that we are well placed for success in the longer term.
“We’ve needed to consider the uncertainty created by the virus on project delivery timelines, the safe and timely completion of the projects before harvest, and the complexity and scale of works for each project.”
On review of the situation, CBH has determined that:
- Work will continue at the storage expansion projects at Konnongorring, Moora and Watheroo, where site work has commenced.
- Storage expansion projects at Brookton, Dale and Hyden will be deferred until early 2021.
“While we are disappointed to defer projects, we are focused on ensuring growers who deliver to these sites are serviced in the best way possible,” Mr Wilson said.
“As crop estimates come in, we will be able to determine if emergency storage is required, or if nearby non-network sites need to be opened.”
Work at the storage expansion projects at Konnongorring, Moora and Watheroo, which started earlier, are progressing well, and are expected to be completed before harvest.
In addition to the storage expansion projects, CBH will continue the annual maintenance shutdowns of our four ports and will progress sustaining network capital projects that increase the useful life of equipment, such as motors, stackers and belts, and infrastructure at receival sites and ports.
“Our 2020 network investment is fully funded, and CBH remains in a good financial position with a strong balance sheet that has minimal gearing and $1.8 billion in net assets,” Mr Wilson said.
“We remain committed to investing in the network for the benefit of our growers and we thank them for their patience as we seek to balance the ongoing challenges presented by the COVID-19 pandemic."