CBH wields axe in restructure

27 May, 2010 04:00 AM
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CBH CEO Andy Crane (left) and CBH chairman Neil Wandel.
CBH CEO Andy Crane (left) and CBH chairman Neil Wandel.

CBH has announced a range of staff redundancies and alterations, in a bid to increase efficiencies and lower its fixed cost business structure.

The move came following an internal review of the co-operative's current staffing and organisational structures.

The review was designed to find ways of making the business operate more efficiently and to review any areas of duplication.

CBH chairman Neil Wandel said the CBH board had asked management to look at areas where they could run the business more efficiently and deliver a report on the outcomes.

When spoken to Monday morning, he declined to say if any immediate job cuts were being made as a result of the project.

But a CBH spokesperson later confirmed staffing changes had been announced on Monday as a result of the Grain Chain project.

"The Grain Chain initiative includes a review of our internal organisation to ensure we remain cost effective and competitive," the spokesperson said.

"As part of this process there have been a number of position changes including some redundancies, which have been announced to employees today."

The staff redundancies and changes announced this week are understood to be part of an initial move, aimed mostly at upper management.

Two senior management positions are believed to be immediate casualties, along with two other management positions in grain operations.

CBH would not confirm the number of redundancies or which management positions had been axed.

It is understood a staff briefing was held on the day to outline the basic reasons behind the staff and structural changes.

Operations in the Kwinana East and West zones are also believed to have been rolled into one, with staff changes to be made in future as a result of that change.

Kwinana East zone manager Allan Walker declined to comment, referring all media inquiries to CBH Public Affairs.

Between the two Kwinana Zones, there are 13 area managers, two zone and quality managers and five offices in Northam, Merredin, Corrigin, Koorda and at the Metro Grain Centre in Forrestfield.

CBH has about 1000 permanent and contract employees.

It is understood the management positions made redundant include executive manager, logistics strategy; general manager, CBH engineering; senior operations manager, strategy implementation and senior operations manager, infrastructure.

It is not known if new positions have been offered within the company to those who were in the roles.

Most industry analysts spoken to by Farm Weekly endorsed the move, saying CBH was responding to the external pressures created by increased competition in the grains industry, sparked by the deregulation of coarse grain and bulk wheat exports in recent years.

They said the staff redundancies and changes would also help CBH generate a lower break-even point in its fixed cost structure.

CBH is understood to have been operating on a fixed cost structure that required 8.5million tonnes of grain a year to pass break-even point.

Speaking to Farm Weekly on Tuesday, CBH chief executive officer Dr Andy Crane confirmed internal announcements had been made about the staffing and organisational changes.

But he said further details regarding numbers and the cost savings generated by the staff changes would not be made until the end of June.

Dr Crane said CBH grower shareholders would be interested to know the purpose of the exercise.

The concept of the Grain Chain project was to improve efficiencies and generate better service.

He said one of the project's aims was to ensure CBH had the right organisational design and the right people in the right positions.

"We can talk more about numbers and savings at the end of June but for now it's about getting the job right for growers," he said.

"We have established a new structure at the highest level of the business and we will follow that change across the rest of the business to ensure we are a lean provider of storage and handling services."

He said for growers, this was the point where, "the rubber hits the road to ensure CBH is best organised for our growers to ensure it reduces its break even point".

Dr Crane said CBH had an internal break even target, but declined to reveal what the new bench-mark would be.

He said the new mark would be discussed further with grower shareholders later in the year.

"The most important thing is the concept (of the break even point) and that is, we need to get it as low as possible," he said.

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