CBH announces future receival sites

The life span of the 102 sites identified as surplus to the future of the CBH network, has been revealed as the co-operative this week continues its series of grower meetings.

Meanwhile the 100 sites that will form the network in which CBH invests $150 million a year over the next five years, includes the construction of a new site called Greenfield at a location yet to be revealed.

The majority of the bins flagged to be closed and used during emergencies or as surge storage have a four to 10 year estimated life span.

Only six sites including Ainsworth, Dudinin, Nomans Lake, Three Springs, Wubin and Yealering are believed to have 10-plus years of viable use left.

During the remaining lifespan of the 102 bins, CBH has indicated it will use these sites but will not be investing new funding into maintenance or upgrades.

CBH's network strategy has drawn the ire of some growers and other commentators in recent months, who have cited lack of transparency and slow progression (by CBH).

These concerns came to a head when Australian Grains Champion (AGC) formed as a company earlier this year.

This brought to light a proposal to change the structure of CBH and adopt a new approach to the CBH network in a time of growing competition in WA with the likes of Bunge building up-country storage east of Bunbury.

Following these events, the CBH board has rejected the AGC proposal and moved forward on revealing its network strategy for the future, and consulting with growers on the future of CBH's structure and governance.

The series of Wheatbelt meetings explaining these moves began in March and conclude this week.

CBH said grower feedback from these meetings indicate 85 per cent of growers in attendance support the board's decision to reject the AGC offer.

The feedback also reveals 90pc of growers support CBH conducting a structure and governance review and 77pc support the network strategy being detailed at the meetings.

CBH chief executive officer Andy Crane said growers were clearly in support of CBH's decisions once having the opportunity to hear the reasoning and ask their own questions.

"There has been the logical question from growers as to 'why aren't you leaving it to us to decided on the AGC proposal', but once we explain the nature of the proposal they fully understand the board made that decision on their behalf and they're backing that," he said.

Similarly, Dr Crane said there was strong questioning around the future of closing or maintaining bin sites, but acceptance was being reached with many.

"We've demonstrated that the focus on fees, site efficiencies, speed of turnaround and tonnes to port needs the network to run differently," he said.

"Growers have been very supportive in that and therefore the way we focus our capital and maintenance to achieve those things.

"It's not solely about which sites are open, it's about the outcome."

Dr Crane said more than two years analysis, through the use of a supply chain optimisation, software mapping, grain flow from paddock-to-port, and the life expectancy of the co-operative's sites, had led them to the final 100 bins that would be the future of the network.

"When you bring that all together it becomes quite clear that the analysis of the current network would say that 100 sites are already receiving 90pc of the grain," he said.

"There was a strong logic to the selection of sites both from modelling and from where the grain is currently going.

"Growers have been improving their own infrastructure on farm in terms of the size of headers and size of trucks and they understand the importance of freight rates and speed of turnaround as much as proximity.

"They have moved on from focusing on closures and now the sense has been more about 'bring us clarity and certainty of sites' so they can further plan their business."

Dr Crane said the next steps of implementing the network strategy was to liaise with the State Government and local shires to help them plan their infrastructure spending.

"I think the shires require that same certainty and clarity as growers, so it's important that we're clear on the sites of the future," he said.

"We've taken into account road and rail rates, but most importantly it's about the logical flow of grain.

"The sites have selected themselves from the modelling."

Several of the sites identified in the 100 sites of the future list have borne the brunt of Tier 3 rail closures, poor road conditions due to increased truck freight movements and are under a cloud due to continuously degrading rail track conditions.

These include Quairading, Kulin, and Trayning - a previously highlighted Tier 2 line.

Mr Crane said regardless of these concerns, these sites were identified as priorities because of their location and condition.

"The sites that have been picked that may be at risk, are being picked for good reasons," he said.

"We've been very clear that immediately once the grower meetings had finished the next people for us to talk to would be State Government and the shires."

Despite arbitration for long term rail access between CBH and Brookfield Rail beginning after years of failed negotiations, Dr Crane said a working relationship between both groups would allow communication on the network strategy to continue.

"We will discuss our plans with Brookfield clearly," Dr Crane said.

"We have a daily and weekly working relationship with our logistics teams and will be working with them on where grain comes from and which sites."

"There's a strong operational relationship that's working well."