Marshall wins as AWB eyes new moves

23 Mar, 2001 01:33 PM

AWB Limited A-class shareholders last week re-elected Lake Grace farmer Laurie Marshall as a director.

Mr Marshall won from a strong field of candidates and secured 53.5 per cent of the final vote, after preferences, having secured 48.3pc of the primary vote.

In the national election of B-class shareholders, New South Wales graingrower Robert Barry was re-elected to the board.

Shareholders also voted to remove AWB Ltd's $150 million capital limitation.

NSW and the Australian Capital Territory A-class shareholders also elected Ian Donges to the board of AWB (International) Limited.

AWB Ltds chairman Trevor Flugge welcomed Mr Donges to the board of AWB (International) Limited and said he was sure Mr Donges would bring a new range of skills and experience to the board.

"I would like to thank all the candidates who nominated for the board and I am very satisfied that the directors elected will serve their term in a constructive and professional manner, which will ultimately benefit Australian wheatgrowers and our shareholders," Mr Flugge said.

Mr Marshall said the vote to remove the AWB's financial cap sent a strong sign to the financial community that the AWB was heading in the right direction.

"Growers have certainly shown a confidence in the board to take the industry into the future," he said. "It's a very positive result for the industry."

Previously, AWB Ltd was restricted as to the amount of equity capital it could use for "non-pool activities".

As a result of the AGM vote, the capital limitation has been removed and Mr Flugge said shareholders made the right decision by abolishing the capital limitation and they should see the benefits of their vote in the near future.

AWB Ltd has stepped up the competition for grain storage and handling, with a bold $40m plan to build six new sites across NSW and Victoria.

To be up and running for this harvest, AWB Ltd is expecting the new, high efficiency sites to cut costs by at least $4 per tonne for growers using them, with corollary savings as traditional bulk handlers drop charges to compete.

But the national wheat exporter says the NSW and Victorian developments are "certainly not the end of it", with plans to enter the fray in WA, Queensland and SA in the future.

Making the announcement at the AGM last week, chief executive officer Andrew Lindberg said the company had a national obligation to compete down the $45/t growers paid, on average, to get their grain to ship.

Those high costs were the target of criticism in the recent National Competition Policy review of the single desk, and the AWB is keen to demonstrate they can be reduced under the present export marketing system.

Mr Lindberg said the investments also made good commercial sense.

"It will broaden the company's revenue base and strengthen its position in the regions, resulting in positive financial returns to our shareholders," he said.

AWB Ltd's new logistics development comes after their first foray into the business in 1999, with the construction of Dimboola (built by Cooperative Bulk Handling), in Victoria.

According to AWB, that site has saved growers about $7 per tonne.

"In addition, the removal of the capital limitation will assist AWB in its listing on the Australian Stock Exchange later in the year," Mr Flugge said.

"The removal of the capital restriction will not affect the main provisions embedded in the AWB's constitution, which ensures that the pool is operated with the ability to fund National Pool Harvest Payments to growers.

"Our main objective will always be to maximise net returns to growers who deliver to the national pool."

"Non-pool activities" are activities apart from the operation of pools by AWB International. Such activities include investments in grain-related commercial operations that are designed to create revenue and profits for AWB Limited and higher dividend payments for company shareholders.

Mr Flugge said he was pleased with the attendance of shareholders at the company's second AGM as a public unlisted company and was happy with the number of shareholders that exercised their right to vote for their company.



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