GROW what customers in China and South-East Asia want.
That was the message loud and clear to 24 WA grain growers, CBH grower director Simon Stead and CBH division managers Jason Craig, Henry Carracher, Ben Raisbeck and Samantha Franke on the 2016 CBH Group grower study tour of China and Vietnam this month.
Growers and Mr Stead said they were surprised at the level of sophistication and discernment in China, where they visited CBH grains customers in its third largest city Guangzhou, the capital of Guangdong Province in the south east, and the national capital Beijing in the north.
Led by CBH's North Asia staff, they toured feed barley trader Jun Jie, the Supertime malting plant, major flour miller Wilmer which is a competitor for CBH's Interflour joint venture in South-East Asia, Seamild Hebei rolled oats and Beijing Yanjing brewery.
Beer is a huge market in China and growers were told women were becoming the main consumers.
In Vietnam they visited the Interflour mill, its deep-water Cai Mep Port facility and the adjacent $70 million Intermalt malting plant being constructed south of Ho Chi Minh City, as well as the Heineken brewery and Interflour Vietnam head office in the capital.
The contrast between China as a developed market for WA grains and Vietnam, with a population of 90 million, as a developing market with potential to become increasingly important to WA grain growers, was a highlight for many on the eight-day tour.
"The sophistication of China and the level of advancement was way in front of where I thought it was - they're an advanced nation as far as I'm concerned," said Boyup Brook grower Peter Reid.
"I had no idea what to expect, I thought we'd see more of an Indonesian-style or Vietnam-style economy, I was blown away with what I saw over there.
"Vietnam, on the other hand is an emerging market where we are seeing growth - it's another China in the making, it will happen in another 10, 20 or 30 years.
"The face-to-face discussion (with clients) was highly valuable.
"At one of our meetings the client indicated they needed some grain and the CBH people with us sold them a ship load of grain there and then.
"If the success of the tour hinged on that, then I think we paid for ourselves pretty well."
Dongolocking grower Joyleen Angwin said China was the highlight for her.
"I think I was expecting something like Vietnam, but the cities we visited were high-rise cities, very orderly, no graffiti or rubbish, very clean and full of expensive cars."
Bruce Rock farmer Franz Fuchsbichler put China's sophistication into perspective.
"When my wife (Leanne) and I were in China 30 years ago we stayed in a nice air-conditioned hotel and the transfer from the airport was in a nice air-conditioned coach," Mr Fuchsbichler said.
"But on that occasion we drove through farm land to get to the hotel and on the road the coach was surrounded by people on bicycles.
"This time there was no farm land - it's been replaced by high-rise apartment blocks, and I didn't see a bike, the roads are full of Audis (Volkswagen-owned Audi has a car plant in China), Mercedes Benz, BMWs and Range Rovers.
"Pushbikes have been replaced by these high pricetag cars."
Another Bruce Rock grower Ian Dolton said the trip made him aware of the requirements of customers of the end products produced from WA grains.
"(The tour) gave me an understanding how the middle class in China has developed to the point where they are conscious about their diet," Mr Dolton said.
"Obviously with the team that CBH has in China they are well placed to take advantage of that market, particularly in the oat area - oats are becoming a developing product in China and WA is well-placed to tap into that.
"Our wheat is regarded as preferred because of the quality and (some clients) indicted they would probably be prepared to pay a small premium for our grain because of the quality, but there is a price point."
David Leake, Kellerberrin, was another grower to note the potential of the rolled oats market in China.
"It's a tough nut to crack but there's a huge potential there," Mr Leake said.
"It's early days, but Seamild are trying to open up a market and good luck to them because if they can get that into a quantum where it sort of looks after itself, then that could be very worthwhile (for CBH growers)."
But Mr Leake, Mr Dolton and other growers acknowledged Chinese clients had raised some issues about Australian grains with the tour group.
They said a particularly "niggle" was with malt barley, where maltsters indicated they preferred the older Baudin variety to the CBH-preferred accumulation Scope variety because Scope took longer to germinate during the malting process and disrupted a smooth production flow.
"With the number of barley varieties - and new varieties coming through all the time - it is hard to organise a shipment, to get a panamax-sized load of one variety is an issue," Mr Dolton said.
"I think WA growers will have to get themselves organised to grow the client-preferred varieties to make them more attractive."
Mr Stead and WAFarmers president Tony York, who joined the tour on the second day in China, also acknowledged care was needed in selecting what crops and what varieties to grow.
"While (China) seems like a bulk market for our commodities, it's actually quite a discerning market," Mr Stead said.
"We've got two advantages, we've got proximity to these markets so we have a freight advantage which is under considerable pressure at the moment with freight rates - that may well come back though.
"Also, our clean green image, that's what they're after - as I say it's a discerning market.
"They want quality, but price is also important, so between price, quality and the relationships we develop, we're in good shape to deliver.
"They have specific requirements and I think we have to listen to what they are saying.
"Our grain comes (into China and Vietnam) in bulk and is broken down into specific grades to suit specific customers, we should listen to what the customers want."
Mr Stead said he would take client issues with later germinating Scope barley back to the CBH board.
Mr York said part of the value of the tour and face-to-face client meetings was helping growers come to "the realisation that farm business doesn't finish at the farm gate and doesn't finish at the port".
"There's quite a long investment chain going right through to the consumer and for grain particularly, I think there's a lot of capital involved in flour mills and malt houses," Mr York said.
"For the main products that we have as CBH there's a lot of investment up the supply chain to get to the end customer - the consumer - it is a difficult and complicated process.
"Vietnam is less developed than China and the infrastructure has got a long way to go before they can get efficiencies out of their supply chain.
"(In China) the markets we are targeting are completely different - they are highly-developed city markets, mainly around the coast.
"Their flour mills and malt houses are first rate and utilising the latest technology, including very good distribution systems.
"You can't say that is what is happening in Vietnam at this stage."
Mr York also acknowledged problems with the number of WA barley varieties.
"It's quite a learning curve to realise that what might suit us (as growers) agronomically, storage wise and handling wise, and production wise in Australia, isn't necessarily a good thing for the malt houses in China," he said.
"It's a complicated process.
"This is an evolution, it is 20 years since deregulation, we've got to build our relationships more with the customer and I think in Australia's production side of things we've been driven mainly by the agronomic preferences and sometimes these market interests - consumer interests - have been secondary.
"We can't afford to do that any more, we have to be conscious of the fact the consumer has to be happy with what we are doing - there is no point in growing something that has 3pc higher yield if no one wants to buy it.
"We need to learn those lessons."
p Mal Gill travelled to Vietnam as a guest of CBH Group. He and an ABC journalist were unable to join the tour in China because permits for agriculture journalists to enter China could not be obtained.