Uncertainty delays CBH expansion

Uncertainty delays CBH expansion

News
Expansion projects at some CBH sites have been deferred due to the uncertainty around the COVID-19 pandemic.

Expansion projects at some CBH sites have been deferred due to the uncertainty around the COVID-19 pandemic.

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Planned storage expansion projects at CBH Group's Brookton, Dale and Hyden sites have been deferred until early 2021.

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PLANNED storage expansion projects at CBH Group's Brookton, Dale and Hyden sites have been deferred until early 2021.

The works planned at the sites were supposed to be completed by harvest this year, but the co-operative decided to delay the projects due to the uncertainty caused by the COVID-19 pandemic.

Work which had already begun on expansion projects at Konnongorring, Moora and Watheroo will continue as originally planned.

On Monday CBH chief executive officer Jimmy Wilson said the co-op had been closely monitoring the impacts on planned network investment for this year since the start of the pandemic.

"Given the uncertainty created by the COVID-19 pandemic, which immediately followed the smaller harvest in 2019-20, CBH has reviewed the delivery of our 2020 network investment," Mr Wilson said.

"While we are in a good financial position, the virus continues to have a significant impact on the broader economy including on our customers, suppliers and financial markets.

"We need to ensure we take a prudent approach in this environment so that we are well-placed for success in the longer term."

While all six projects were fully funded for this year, the decision to delay three of them came down to concerns about contractors and shipping.

Mr Wilson said while it was fortunate that WA was not nearly as badly affected as the rest of the world, there was a fair bit of angst and nervousness going around at the time the decision was made.

"We have to turn the clock back two months and at that point we were worried we would not be able to get contractors out to the sites," he said.

"We didn't know how severe the State lockdowns were going to be and we didn't know how impactful COVID-19 would be on WA.

"In addition to that, we weren't sure if we would be able to ship our product and if we couldn't do that, we wouldn't have been able to get income."

Mr Wilson said while they were disappointed to defer projects, they were focused on ensuring growers who deliver to these sites were serviced in the best way possible.

"As crop estimates come in, we will be able to determine if emergency storage is required, or if nearby non-network sites need to be opened," he said.

In addition to the storage expansion projects, CBH will continue the annual maintenance shutdowns of the four ports.

The co-operative will also progress sustaining network capital projects that increase the useful life of equipment, such as motors, stackers and belts and infrastructure at receival sites and ports.

Mr Wilson said that overall, since 2017, CBH had accelerated the delivery of network projects.

"During this time, we have added 2.2 million tonnes of permanent storage to the network and deployed 62 throughput enhancement projects, which is more than has been added in the preceding seven years," he said.

"Our 2020 network investment is fully funded and CBH remains in a good financial position with a strong balance sheet that has minimal gearing and $1.8 billion in net assets."

"We remain committed to investing in the network for the benefit of our growers and we thank them for their patience as we seek to balance the ongoing challenges presented by the COVID-19 pandemic."

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