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CBH Group to spend $4B on network over decade

Grain Central, November 2, 2022

Cadoux in the Kwinana North Zone received its first load for the season on the weekend. The site has undergone a major site expansion as part of this year’s network investment. Photo: Shaun Kalajzic

WESTERN Australia’s CBH Group has plans to spend $4 billion over the next 10 years on the co-operative’s network grain receival, storage and outloading infrastructure and assets.

This is in line with the CBH Strategy to reach a monthly export capacity of 3 million tonnes (Mt) by 2033 or sooner.

Chief operations officer Mick Daw said last year’s record crop reinforced the need for CBH to continue with increased levels of investment in the network, particularly in outloading projects critical in generating price value for growers in the first half of the year.

“As the crop size continues to grow, we must invest more to improve our ability to receive the harvest efficiently, sustain current assets, and build infrastructure to increase the tonnes to customer capability of the network,” Mr Daw said.

“Over the last five years, CBH has invested more than $1.2B in the network, and we are pleased to commit to investing $4 billion over the next 10 years.

“Increasing the capacity of our network is critical to maximising the value of growers’ grain in international markets, and sustainably creating value for WA growers, both current and future.”

Network investment projects for 2023 include: site expansions; storage refurbishments; temporary storage builds; accommodation; throughput enhancements; receival-equipment upgrades, and rapid-rail outloading facilities.

In addition, CBH is in the process of purchasing new rail rollingstock, and unlocking supply chain capacity in the Kwinana zones by progressing work on the Avon narrow-gauge/standard-gauge transfer facility.

A summary of key projects by zone completing in FY22 and commencing in 2023 can be seen in Table 1.

CBH has spent an average of $240 million per year over the past five years, while today’s announcement points to an annual spend of $350M-$450M.

Over the past two years alone, CBH has added an extra 5Mt of permanent and temporary storage to the network.

CBH Group chief project delivery officer Sam Gliddon said temporary storage played a significant role in bringing in last year’s record crop and will be an important part of the network infrastructure mix moving forward.

“If we look at how much temporary storage has been added to and planned for the network over the past two years, CBH will have increased its entire network storage capacity by over 20 per cent in just 12 months,” Mr Gliddon said.

“This is a phenomenal effort, and much needed across all zones.

“Our strategy includes converting many of these temporary storages to permanent specifications in the future.”

Rail investment will be a significant feature of network investment moving forward, in line with the CBH Strategy, to increase the logistical performance of the network.

Commercial negotiations are currently under way for the acquisition of standard-gauge locomotives.

CBH will continue progressing rapid rail outloading and siding projects which has received a contribution from the $200M in funding from state and federal governments through the Agricultural Supply Chain Improvements (ASCI) program.

Construction on at least two of these rapid-rail outloading facilities will start in early 2023 and an additional nine rapid-rail and siding projects will follow.

CBH continues to work through the approvals process with government stakeholders while procuring long lead items for track and outloading facilities, including steel, sleepers, bins and conveyors.

Source: CBH Group

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