Bunbury grain terminal may change hands

Liz Wells January 24, 2020

Bunge’s Bunbury terminal loads oats and wheat in 2018 on the Hupeh prior to its departure for Newcastle.

A GREAT terminal in the wrong place: that’s how the Australian grain industry views the bulk terminal built by Bunge at Bunbury.

According to industry sources, and to a West Australian newspaper report published last month, it is up for private sale to allow the multinational to concentrate its WA operations on accumulating and trading at its sites at Arthur River and Kukerin in the WA Wheatbelt.

While Bunge has not been available for comment on the sale, it is a hot topic of conversation in WA, where CBH Group, Australia’s largest cooperative, is a mighty force in bulk handling and shipping.

Road reliance

Bunge opened Bunbury, its only export terminal in Australia, in 2014.

It has a holding capacity of 50,000 tonnes, and has loaded numerous cargoes of grain and canola for the export and drought-driven domestic trans-shipment market.

However, its reliance on road-only supply at a time when CBH Group is making headway on improving efficiencies in rail-to-port appears to have worked against the Bunge terminal’s ability to make a profit.

“Their delivery point at Arthur River went well, and their efficiencies there are well ahead of CBH, but the cost to get it to the terminal is higher,” one source said.

“CBH can offer growers free storage for some months,” another source said.

“That’s not something a company like Bunge is able to do.”

More competition for grain

Sources have pointed out that Bunge has been a capable trader, and one growers are prepared to deal with as the grain-marketing landscape in WA changes.

Bunge operates two up-country sites and a grain terminal in WA to make it one of the state's secondary bulk handlers also receiving canola and grain. Photo: Bunge WA

Canola from Western Australia’s 2018 harvest is delivered to a Bunge site. Photo: Bunge WA

It involves increases in on-farm storage, and the entry of some new players, including pool operator Market Check.

“What’s been happening over the past few years is that there’s more private buying, a swing away from CBH.

“CBH have been quite aggressive in terms of their own grain acquisition in that area.”

But since the boom year of 2016/17, grain trading has not been plain sailing for anyone operating in WA.

That includes CBH, which recorded a significant trading loss in its latest results, and the announcement last year by Plum Grove that it would cease accumulation.

Tough in south-west

Sources have said a privately owned bulk terminal built with potential to load grain in Albany in recent years has gained even less traction than Bunge’s Bunbury terminal.

“There has not been a grain shipped out of that facility.

“Therein lies the challenge.

“I think competitors can underestimate the reaction from CBH, which has made it quite clear they weren’t going to rest on their laurels.”

Grain Central understands CBH operated a bulk grain terminal at Bunbury from the 1930s to the 1980s, but in recent decades has invested heavily in its rail-linked Kwinana terminal closer to Fremantle.

Media reports in 2017 said CBH was investigating re-establishing a presence in Bunbury.





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