West Australia grain grower slams bid to takeover CBH Group

20.09.2016

A West Australian farmer and grower advisor to the CBH Group board has labelled a proposal to corporatise Australia’s largest grain exporter as selfish and unfair.

The plotters behind the GrainCorp-backed bid to float CBH on the stock exchange yesterday withdrew their plans after conceding they'd been unable to win the support of growers.

Lake Grace farmer Royce Taylor, a member of CBH's grower advisory council, said the withdrawal was good news for WA's grains industry.

"I think the proposal from AGC was fairly selfish right from the start. CBH has been part of our farming process for the last 80 years," he said.

"CBH has been there for my father and I want them to be there for my son in the future as well. To take that away from us, I didn't think was fair.

"You've only got to look at the growers in South Australia, what they've been through with their bulk handler being privatised.

"All the growers that I know there tell us never get rid of it, it's something that has increased their charges since they've been privatised. It hasn't been a good thing."

East coast grain handler giant GrainCorp had pledged $300 million to the Australian Grains Champion (AGC) bid.

Mr Taylor said GrainCorp's involvement in the proposal had deterred some growers from supporting the bid.

    "It's good to have a look every now and then, it's good to go through these processes and keep CBH on their toes.

"Let's keep them ahead of the pack and keep it going as it is now.

Farmer and AGC director Brad Jones said it was a mutual decision between his group and GrainCorp to withdraw the offer.

He defended why the group had originally teamed up with GrainCorp.

"Teaming up with GrainCorp made absolute strategic sense because CBH and GrainCorp would be a formidable opponent for the Black Sea and South American producers who are currently eroding our market," Mr Jones said.

"There was a lot of support [from WA growers] behind the scenes, not so much vocal support.

"People could understand the strategic sense in teaming with GrainCorp and making an Australian player."
CBH continues its review of structure

The CBH Group would not speak to ABC Rural, instead supplying a written statement from board chairman Wally Newman.

"The board was unanimous in its view that the proposal did not represent value for Western Australian grain growers and it would have delivered a strategic blocking stake in CBH to east coast grain handler and competitor GrainCorp," he said.

"We surveyed our members and they were very clear, 78 per cent of growers supported the board's rejection of the proposal."

CBH leaders have travelled the state meeting with members as part of a review of the coop this year.

The company released some details of three potential future business models last month.

Mr Jones said while he respected CBH's review process, he didn't expect it would lead to any substantial change.

"I honestly don't think much will happen at all personally," he said.

"One of the things that really disappointed me in this whole process was the fear and propaganda that CBH used against us when the whole motivation behind it was for a better WA grains industry.

"The conversation was never allowed to flow. CBH like to control the whole process. That has come to play with how we've been seen in the greater grower world as well.

"The support was there but I do think many doubted our ability to achieve such wholesale change in the face of such an obstructionist board."

Mr Jones said he and other AGC directors would not stand for the CBH board.

    "I personally wouldn't like to be in there, and I think my fellow directors feel the same.

"I don't see it as a really effective organisation at board level so I really don't want to be part of it."


ABC
 

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