Structural review for CBH

01 Jun, 2016 04:00 AM

CBH Group will undergo a governance and structural review in the wake of the Australian Grains Champion (AGC) proposal.

The review will encompass all areas of the business and also puts part, or complete, corporatisation on the agenda.

CBH spokeswoman Samantha Francke said the co-operative had conducted extensive consultation with more than 2000 members in regards to its structure and future plans.

"The feedback showed that while 70 per cent of growers were happy with the co-operative structure, 89pc wanted to see a structure and governance review," she said.

CBH survey growers each quarter on a range of topics, including structure, diversifying investments, services and fees.

Ms Francke said while there had been on-going discussions over many years in regards to the way forward for the 83-year-old business, the latest review was sparked by the AGC plans.

"This review will help show if there is a real desire for change in the co-operative model or if we need to do some tweaking to our structure," she said.

The review process is underway, following consultation meetings with growers throughout March and April.

A second round of consultation will occur soon, with the outcome expected in September.

"Every grower will have the opportunity to have their say," Ms Francke said.

"Certainly, for some growers the idea of corporatisation is attractive for a range of reasons, particularly a cash payout option, however the review will really bring a sharper focus to the issues and what growers want from their co-operative."

In response to the AGC proposal and criticism that it was not put more widely to growers, Ms Francke said it was the board's responsibility on behalf of its members to investigate and review proposals.

"The board has been elected by growers to review proposals like this," she said.

"If it had been a good proposal, it would have been put to growers."

An AGC spokesperson said the group was reviewing its options following the rejection of its proposal in March.

Pastoralist and Graziers Association (PGA) president Tony Seabrook said he was happy to see a debate on CBH's future.

He said ultimately the market would decide if the co-operative model was successful.

"I would like to see the debate go further and explore if growers want change," Mr Seabrook said.

"The PGA is of the opinion that CBH has been under-performing and we are happy to see that the AGC proposal has sparked a conversation."

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Brad Jones
1/06/2016 6:38:00 AM, on Farm Weekly

Transformations often begin, and begin well, when an organization has a new head who is a good leader and who sees the need for a major change. If the renewal target is the entire company, the CEO is key. If change is needed in a division, the division executive is key. When these individuals are not new leaders, great leaders, or change champions, phase one can be a huge challenge. Is CBH ready for change?
central wheatbelt
8/06/2016 12:30:44 PM, on Farm Weekly

Would have to agree with Brad, CBH will fluff its way through their structural review. Management will be ready , directors will be still working out how to hang onto their boardroom seats. Though with the AGC deal growers need more skin on the table from Graincorp for the cash and shares. We need control of their assets as well. You never get the deal done in one easy move, come back with more premium for WA growers AGC.
beacon boy
8/06/2016 6:25:16 PM, on Farm Weekly

For those of us who farm in the eastern Wheatbelt, it is obvious our storage and handling costs are going to rise no matter what happens to CBH. The Western producers given any choice, will jump to the cheaper paths to market and leave CBH with our tonnes to derive their profits from. For me, I prefer a future where I have my equity in the form of shares in a company that pays dividends to offset these rising costs. Any cockie with half a brain out here knows the cross subsidisation is not far off ending.
8/06/2016 6:29:43 PM, on Farm Weekly

Had to laugh at the grand announcement of what would be the sites of the future. Dreyfus will shortly put theirs out and it will likely be just 2 sites in the Kwinana zone (Meckering and Muchea) and likely circa 2mmt each. CBH cannot possibly compete. Once Kwinana the most profitable tonnes from KWI go to the competition it is curtains for the co-op and sadly $2 shares would likely only fetch that much at the receivers.
Enough Rubbish
9/06/2016 11:06:05 AM, on Farm Weekly

I reckon the best thing beacon boy and consolidated can do for all of us is to sell out to the Chinese and go away. It will give us a rest from their bleating and stop us having to mop up their tears!!
11/06/2016 6:18:06 PM, on Farm Weekly

The current CBH representation model ( Zones , based on grower numbers ) belongs in the dark ages. CBH has a significant number of growers delivering the minimum tonnage required to retain a CBH share. Reflecting on zone tonnage the Esperance zone has grown more tons on average than Geralton over the past 5 years- Geralton has two directors, Esperance one. Moving forward CBH needs a more equitable representation model


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