THERE were plenty of questions from the floor at Monday's CBH AGM, here is a sample of what some growers asked.
MERREDIN grower Andrew Crook was one of several to ask board members about the likely impact of increased competition for CBH, particularly from multi-national agribusiness Bunge Ltd.
“Has the CBH Board been surprised at the reach and quickness of the competition that has come into WA?” Mr Crook asked during a question time at the end of the meeting.
He cited an example of a local grower who had previously delivered to Kwinana, but who was now delivering to Bunge and back-loading lime from Myalup and claiming to be “$12 (a tonne) in front”.
“What reassurances can the board give me that the focus is on CBH’s sustainability?” he asked.
“We’ve had good revenues the last couple of years but that has been derived from record or above-average tonnages.
“What happens when we have a below-average crop, and we will have at some stage?”
Chairman Wally Newman replied that CBH was well aware of the increased competition and that the network optimisation project already underway would help maximise grower returns and network efficiency, making it harder for the competition to match CBH price and benefits.
“The analysis is in place to allow us to meet the challenge of competition,” Mr Newman said.
MORAWA grower Chris Moffet attacked the board for failing to apologise to growers for incorrect information he claimed was provided in relation to the Interflour Group investment in Asia by CBH.
Mr Moffet said he had asked at last year’s annual meeting “about the flour mills investment and how much debt was on it”.
He told this year’s meeting that the answer last year was that there was no debt.
However, Mr Moffet said that on questioning CBH executives he later established there had been a debt owing to the restructuring of the business.
“The information given to me and shareholders was not accurate,” he said.
“It has done nothing to alter my view that the flour mills up there (Asia) are not a particularly good investment for us.
“There has been very little real return from it.
“I think it is perhaps the appropriate time to take a profit on the investment, sell and invest in an alternative.”
Later, after chief financial officer Ed Kalajzic confirmed no money was now owed by CBH on the Asian flour mills, Mr Moffet stood up and attacked the board for not apologising.
“The loans have only just been paid off,” he said.
“I would have thought that one of you up there would have had the gumption to stand up and apologise to shareholders for the incorrect information given to the meeting last year.”
Several other growers also asked about the Interflour Group investment of the past 10 years.
Chairman Wally Newman defended the investment saying it provided CBH with an option to sell its grain in a “flooded market”.
Mr Kalajzic told the meeting Interflour provided a $5.9 million return in the past year, lower than forecast.
RAVENSTHORPE grower Andrew Duncan took several opportunities to question CBH, highlighting his concerns with competition, the network and board composition.
He said the ageing network, particularly in his region, and a board seemingly focused on rail freight only would be a detriment to the majority of growers.
“In Esperance where tonnages have gone from 400,000 tonnes to 1.2 million tonnes over 13 sites, I think it is pretty admirable,” Mr Duncan said.
“But when I look around at sites in our area the maintenance has not kept up with the tonnages.”
He called on CBH to independently review maintenance and freight needs to recognise problems that currently exist and those set to arise in the future.
“For the first time ever in this State, we’ve got Bunge coming in as competition and they’re aiming to take 1mt of grain in WA in the next three years,” he said.
“We can’t be only looking at rail to reach growers, what about road?
“What is the board going to do to position the current network to maintain the competitive edge and make the current pricing realistic.”
In response, CBH chairman Wally Newman said the network as a whole would be reviewed through the in-progress Supply Chain Optimisation project.
CBH general manager of operations David Capper said this approach added to a focus on all types of freight across the network.
“We’re not solely focused on rail, in the last round of contract renegotiations for the Geraldton and Albany zones there was opportunity for a reduction in road rates,” he said.
Mr Duncan’s board composition concerns centred on the benefits he believes comes with maintaining independent directors on the board.
He called for a consitutional change to be considered for CBH to maintain three independent directors at all times, rather than the current ‘up to three’ independent director requirement.