WA growers are now stakeholders in the most modern and integrated grain port facility in South East Asia.
A new US$55 million grain terminal and port facitility was officially opened in Vietnam on December 1 and CBH shareholders were excited about the new marketing opportunities the facility would offer.
Located on the Thi Vai River at Ba Ria-Vung Tau, the facility is 100 kilometres south east of Ho Chi Minh City and 35km from the open sea, with import and export capabilities to rival some of the best terminals in the world.
The new facility is operated by Interflour Vietnam which forms part of Interflour Holdings, one of South East Asia's largest flour milling groups, owned in partnership by the CBH Group and the Salim Group of Indonesia.
In response to the opening of the facility Interflour Vietnam also reported that it would begin extensive development of its flour mill in Ba Ria-Vung Tau which would double its capacity to 1000 tonnes a day.
The expansion would also help to develop Vietnam's rapidly increasing trend for flour-based products as local consumers steer away from its rice equivalent.
CBH Group chairman Neil Wandel said the opening of the Interflour Vietnam grain port terminal and the start to the expansion of the flour mill there were important financial and symbolic milestones in the history of Interflour and its close relationship with WA growers.
"We are happy to be a part of these developments and we congratulate all those who have contributed to making it happen," he said.
Mr Wandel said Interflour's use of wheat from WA had increased significantly since CBH first invested in its six flour mills in Indonesia, Malaysia and Vietnam in 2004.
"Our changing environment meant that we, as growers needed to look at getting a direct stake in the grain value chain beyond the farmgate and getting closer to our customers," he said.
"We wanted to do more to drought-proof our business by diversifying our income, to secure and increase our access to rapidly growing markets, to ensure more of the value generated beyond the farmgate came back to growers and to create more value for growers by helping Interflour to improve and expand its operations.
"To date, most of Interflour's profits have been reinvested into growing the business, including the expansion in Vietnam."
Mr Wandel said CBH was getting dividend payments from Interflour and the outlook was promising.
"This is particularly timely, helping to balance the inevitable negative impact on CBH's financial performance of the drought we are now enduring in WA," he said.
Interflour chief executive officer Greg Harvey said the new port terminal was a state of the art facility with significant competitive advantages over other ports in Vietnam and South East Asia as a whole, including much faster unloading rates and the ability to accept bigger ships.
"The investment in the terminal and the expansion of the flour mill reflect the strong growth Interflour has been able to achieve in Vietnam and the positive outlook for flour demand," Mr Harvey said.
He also said feedback had been supportive and shareholders recognised that it was a world class facility and the best grain port in South East Asia.
"It's expected that over 80 per cent of the wheat imported through the port will be from WA," he said.
The decision to build the facility was taken in 2007 and profit will be generated from day one with the port operation.
A number of WA growers felt the there could be benefits from the expansion and said the prospect of importing 80pc of the facility's grain from WA was certainly in the best interest of CBH and its shareholders.
"We'll probably all tell you the same thing," one CBH shareholder said.
"It sounds very promising and I'll be very interested to see what kind of benefits we see as growers in WA.
"It certainly sounds like a good investment at this stage but until we all know more about the specific benefits it's going to provide for us then it really is hard to say.
"The proof will be in the pudding."
