CBH will continue its expansion into oat processing by building a new facility at its Metro Grain Centre in Perth.
CBH chairman Wally Newman made the announcement on Tuesday with Blue Lake Milling (BLM) chief executive officer Ben Abbot and Regional Development Minister Terry Redman.
Mr Redman said the decision by one of WA's biggest agri-food players was "really important" in building confidence in the agricultural market.
He said there was significant interest in WA agribusiness and a huge focus on the industry and the opportunities available, with $7.78 billion dollars of agrifood products exported from WA last year.
"I congratulate CBH for this initiative as it brings CBH's international connectivity and BLM's technical skills together," Mr Redman said.
Mr Newman said the project builds on CBH's acquisition of BLM in June last year and on CBH's oat strategy to become a leading, vertically integrated oat processor.
"This investment supports our oat strategy and provides growers the opportunity to generate and capture additional value in the oat supply chain as well as improve returns to the co-operative and strengthens demand for WA oats,"Mr Newman said.
Operating alongside the Metro Grain Centre's container loading facility, the processing plant will take over CBH's former lupin dehulling plant, which was part of a $15 million investment at the Forrestfield site in 2005.
He said the facility would be a "tens of millions of dollars" investment, but at least 50 per cent of the cost of the project was reduced due to the existing infrastructure at the site.
About 500,000 tonnes of oats are grown in WA each year as a break crop, however this amount would need to double in order to meet demand in Asia.
Prior to CBH's acquisition, BLM was a family-owned business established in Mt Gambier in 1867.
It is one of six major oat processors in Australia and specialises in oat milling to produce premium rolled, quick and instant oats for both the domestic, private label and Asian markets.
It operates two processing plants, one in Bordertown in South Australia and a second site at Dimboola in Victoria's Wimmera.
The addition of the WA site will double BLM's processing ability to 120,000 tonnes of finished product per year and make it the largest independent oat processor in the Australasian region.-
The site will be operated by BLM, running 24 hours a day, five days a week and employing approximately 25 people once opened.
Technology currently used at its SA and Victorian sites will also allow it to be monitored and controlled remotely.
BLM chief executive officer Ben Abbot said the partnership between CBH and BLM would allow BLM to become a global player in oat processing.
"The new facility, combined with WA's oat quality and export focus, will allow BLM to meet the growing demand in Asia for oat products,"Mr Abbot said.
He said the WA facility's proximity to Asian markets and its export focus would allow the company to be more competitive due to reduced freight costs compared to its SA and Victorian sites.
The facility is scheduled to open in December 2017.