December 18, 2009

CBH evaluates ownership structure to maintain competitiveness

Australia's Cooperative Bulk Handling Ltd. (CBH) will review its structure in light of changes in the wheat industry and some grower support for a proposal to transform the cooperative into a listed company.

According to CBH chairman Neil Wandel, the review will start in January and aims to ensure the most appropriate and advantageous structure is in place to ensure the business captures and delivers as much value as possible to members.

The review comes after CBH faced a renewed push in October from some of its 4,700 grower members to demutualise, a process that could result in disbanding of cooperative membership in favor of share ownership and possible listing on the stock exchange.

Wandel said various structures will be considered, including the current one, before the most appropriate is chosen - to ensure CBH remains competitive and flexible.

Major industry changes cited include the liberalisation of bulk wheat exports in July 2008 and recent industry consolidation. Canada-based Viterra Inc. completed its A$1.6 billion (US$1.42 billion) takeover of ABB Grain in September.

CBH operates 200 upcountry grain storage sites and four coastal export terminals in Western Australia. In its annual report, for the fiscal year ended September 30, 2008, the cooperative declared total assets of A$1.70 billion (US$1.50 billion), net assets of A$976.6 million (US$866.6 million), revenue of A$1.10 billion (US$976,315) and a net profit of A$40.1 million (US$35.5 million).