"Line ball" call on CBH election

09 Feb, 2017 02:00 AM
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CBH incumbent director and deputy chairman Vern Dempster.
CBH incumbent director and deputy chairman Vern Dempster.

CBH director incumbent Vern Dempster is expecting the upcoming CBH District 2 election to be close as the deadline for votes closes on February 20.

Mr Dempster, who is standing against Cunderdin grower Stuart Mussared, said he expected the results to be a "line ball".

"I think Stuart has done very well and got his name out there, it could go either way," Mr Dempster said.

He said during the election process a number of issues had been raised with him by growers in regards to CBH's investments, including its fertiliser business, its 50 per cent in flour mill company Interflour and Blue Lake Milling.

In the 2015-2016 financial year, Blue Lake Milling recorded a $2.4 million profit, Interflour generated a $300,000 profit while CBH's fertiliser business recorded a $1.7m loss.

"The return on these investments has attracted a bit of criticism and that some of them don't return well," he said.

"While Interflour for example made a very small profit this year over its 10-year period I think the return on its internal rate of return is about 10pc.

"The investment in fertiliser seems to have also struck a chord with some people.

"It wasn't a big investment from CBH's point of view and we've made a small loss but the management is still learning about it.

"It is hard to demonstrate to members that you've saved them money by being in it, but I think we have."

Mr Dempster said growers had also expressed frustration at not being able to vote directly on the Australian Grains Champion proposal that was put forward last year.

"On the face of it, it's easy to say to put it out for a grower decision but if you did that to every offer that came along, whether it was a good offer or a bad offer, that would be essentially saying that CBH is for sale and that we're going to present all offers," he said.

"If it's an offer that's not up to scratch I don't know why you would put it to a vote."

This was been the issue for Mr Mussared who has been critical of the board's decision not to put the AGC proposal to a vote with growers.

Mr Mussared held grower meetings in Bolgart, Doodlakine and Wyalkatchem last week and said while the board had a responsibility to view and analyse that proposal, growers had a right to vote on important issues.

"The board is never going to say growers should vote for it but at least they can say that this is a poor proposal and give a recommendation but also put it to a vote out of respect," Mr Mussared said.

"Had we gone to a vote and even up to 30 per cent of members voted for the AGC proposal it would not have passed and it would now be tidied up now and not still festering away."

He said claims, which had been suggested in a letter by Mr Dempster, which had been sent out to District 2 members that he had an alignment with AGC were "ridiculous".

"I am a businessman and would want to view any proposal in its entirety before making a decision," he said.

"I farm in the same shire as Brad and while I have seen him socially and I do talk to him but I am not associated with him or AGC.

"It is almost embarrassing - I am a farmer who is good with figures and passionate about a few things and CBH is one of them but this agro-politics I can't believe it has turned into some sort of animal and what is embarrassing is these guys are directors of our $2.5b company and is this how they cope under pressure when they are making decisions?"

District 1 incumbent and Morawa grower Rod Madden said the main issues in the northern region were related to congestion and a lack of segregation at particular sites.

Mr Madden, who has been on the board three years, following a two-year break from a previous six-year stint, said while in general growers were "reasonably happy" with the performance of CBH he agreed there was a "fair bit" more work to do in certain areas.

"The main issue from the network is the congestion at major sites and the lack of segregation at other sites on the inland line at Perenjori, but we are beginning to address these issues," Mr Madden said.

He said CBH's debt-to-equity ratio was very low and while growers may want to see this returned in the form of exit payments or higher rebates, it provided the co-operative with the funds to invest in the network strategy and other potential opportunities.

"At the moment the debt-to-equity ratio is very low with a huge amount of equity and not a lot of debt - that is for a good reason because we have $750m to spend on the network over the next few years and this will probably be more.

"Plus if there are any really good opportunities that come by we need that equity and capital base to grab hold of them

"Over the next three years you'll see some massive changes in CBH."

Northampton grower and director candidate Brad Cripps said he expected it would be difficult to unseat Mr Madden but said there was "a mood for change" in the region.

Mr Cripps, who has leased out his Northampton property to focus on the director election, said he wanted to see more transparency in costs, clear information provided in on the network strategy and rebate system.

He said corporate costs were "spiralling out of control", with CBH spending $192m on these costs in 2015-2016, compared to $122m in 2011.

"In 2015 CBH had $1.1b set aside for the network strategy and in early 2016 they cut that to $750m but no one has a clue on what is in that strategy or if their bin is going to be affected," Mr Cripps said.

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READER COMMENTS

Carter Track
18/02/2017 4:16:08 PM, on Farm Weekly

Seeya Vern, we need some big changes, get rid of Walley Newman while we are at it. Let's see if there are some big changes in CBH over the next few years.
MJ
10/02/2017 9:20:35 AM, on Farm Weekly

Madden says in next 3 years you'll see some "massive" changes at CBH. C'mon on Rodney the suspense is killing me, wat could they be?? Or haven't you thought of them yet and just electioneering?
Deregul8
9/02/2017 8:48:40 AM, on Farm Weekly

You are a gonnas Vern. The troops are getting restless and see the 2017 CBH choke coming as soon as November.

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