CBH Group explained

CBH Group
Type:Cooperative
Founded:5 April 1933
Location:Level 6, 240 St Georges Terrace, Perth, Western Australia
Key People:Ben Macnamara (CEO)
Simon Stead (Chairman)
Area Served:Western Australia
Industry:Agriculture
Products:Grain marketing, logistics
Revenue:$4.19 billion (September 2019)
Net Income:$60.8 million (September 2019)
Num Employees:1,100 (September 2019)

The CBH Group (commonly known as CBH, an acronym for Co-operative Bulk Handling) is a grain growers' cooperative that handles, markets and processes grain from the wheatbelt of Western Australia.

History

CBH was formed on 5 April 1933,[1] at a time when a royal commission on bulk handling of grain was in progress,[2] and after over 20 years of failed proposals for bulk handling of grain in Western Australia.[3]

The trustees of the Wheat Board of Western Australia and Wesfarmers registered the company together with capital of £100,000 divided evenly into 100,000 shares.[4] [5] The cooperative was formed under the principle of one person, one vote, regardless of the amount of grain supplied.

CBH merged with the Grain Pool of WA in November 2002, after the Parliament of Western Australia passed legislation allowing the merger to go ahead.[6]

In 2016, the Australian Taxation Office revealed that despite generating more than $3.4 billion in revenue in 2013/14, the company paid no tax. This made it Australia's biggest revenue earner not to pay tax in the period under review.[7]

Transport

During the early years most grain movement was by rail over the Western Australian Government Railways network, with sidings and branch lines specifically serving wheat growing areas. Many of the branch lines and rail facilities have not been updated or maintained, with road transport increasing in many areas.

In 2009, CBH decided to put its rail grain haulage services out to tender for the first time.[8] [9] It aimed that the amount of grain transported by rail rise from 50% to 70%.[8] [10] CBH settled on a business model that saw it invest in new locomotives and grain wagons, with day-to-day operations contracted out.[11] [12]

In December 2010, CBH awarded Watco Australia a ten-year contract to operate services in the south of Western Australia.[13] [14] [15] To operate the services, CBH purchased 22 CBH class locomotives from MotivePower, Boise[16] and 574 grain wagons from Bradken, Xuzhou.[17] [18]

Under the agreement, Watco was responsible for providing a comprehensive rail logistics planning service, including train planning and scheduling, tracking, maintenance, inventory control, and crew management.[19] Watco operated and maintained the rolling stock, with ownership remaining with CBH.

The services link various CBH grain collection points in the wheatbelt with CBH terminal and port facilities in Albany, Geraldton, Esperance and Kwinana.[20] CBH operate on the Arc Infrastructure managed open access network.[21]

Although the contract officially commenced on 1 May 2012, Watco operated its first service on 30 March 2012.[22] [23] [24] Because of a delay in the delivery of the rolling stock, QR National continued to operate some gauge services until October 2012,[25] while to operate standard gauge services, locomotives were hired from Chicago Freight Car Leasing Australia and SCT Logistics.[26] A further three locomotives were delivered in 2015 as compensation for late delivery of the original order.[27]

In October 2013, CBH referred an ongoing dispute with the network owner Brookfield Rail over track access prices and the state of the network to the Economic Regulation Authority.[28] [29] In December 2017 CBH Group expanded its locomotive fleet purchasing 10 DB class locomotives from Aurizon.[30] [31]

When next tendered, the contract was awarded to Aurizon for six years with an option to extend to 10 years. Aurizon introduced a further three sets of wagons to the 10 owned by CBH.[32] [33] Although scheduled to transition in May 2022, all parties agreed to bring the handover date forward to September 2021.[34] [35]

Tonnages

In 1999/2000 season CBH received a record amount of grain, 12.2 million tonnes in all, made up of 11 different grain types.[36]

CBH received a new record harvest of 14.7 million tonnes from grain growers in Western Australia during the 2003/2004 season.[37] This record was broken in 2013/14, with 15.8 million tonnes of grain handled by January 2014.[38] [39]

New records were set in the 2016/17 season when the company received 16.6 million tonnes of grain. The company expected over $5 billion to have been pumped into the Western Australian economy as a result of the record harvest. A new record for the month of December was set with 831,000 tonnes of grain moved to port via rail. The highest monthly shipping record was also broken in January with 1.88 million tonnes shipped out. The previous monthly shipping record of 1.66 million tonnes had been set in February 2014.[40]

Harvest management

See also: CBH grain receival points. Historically the CBH system had up to 300 receival points[41] – in most cases tied into the Western Australian Government Railways railway network, as the railway lines were the prime grain transport method.

By the 2000s, the number of receival points had been reduced to less than 200[1] and the locations of the receival points became part of a system of management zones:

Each zone is further broken down into areas.[42]

Further reading

Notes and References

  1. Web site: Key Facts & Figures. 2012-04-12. CBH Group. 17 March 2012. https://web.archive.org/web/20120317145303/https://www.cbh.com.au/about-us/key-facts--figures.aspx. live.
  2. News: THE COMMISSION'S REPORT. . . Perth . 16 August 1935 . 5 March 2014 . 25 . National Library of Australia.
  3. Western Australia was by no means unique – there had been Royal Commissions into Bulk Handling of grain in other states – Victoria in 1902 for example
  4. Web site: Co-operative Bulk Handling Website- History . 2008 . 2008-05-23 . https://web.archive.org/web/20080429193650/http://www.cbh.com.au/index.html . 29 April 2008 . dead.
  5. See also the history of Western Australian Farmers Federation that shows the relationship between the WAFF, CBH and Wesfarmers
  6. Web site: ABC News Online – Farmers' group welcomes merger legislation. . 2002. 2008-08-04.
  7. News: 98 private companies earning over $200m pay no tax: ATO. ABC News. 22 March 2016. 2016-04-04. 6 April 2016. https://web.archive.org/web/20160406103552/http://www.abc.net.au/news/2016-03-22/ato-30pc-of-large-private-companies-pay-no-tax/7266454. live.
  8. http://www.railexpress.com.au/archive/2009/november/november-11-09/other-top-stories/bidding-underway-for-wa-grain-rail-management Bidding underway for WA grain rail management
  9. http://www.abc.net.au/site-archive/rural/wa/content/2009/11/s2746623.htm Tender plans for rail future
  10. http://www.theaustralian.com.au/business/news/asciano-in-700m-grain-bid/story-e6frg906-1225911572877 Asciano in $700m grain bid
  11. https://www.cbh.com.au/media/240596/pick%20of%20the%20crop%20es%20hr.pdf Locomotives roll off production line and wagons hit the WA shore
  12. http://www.mediastatements.wa.gov.au/pages/StatementDetails.aspx?listName=StatementsBarnett&StatId=6320 Major new investment in WA grains industry
  13. http://www.perthnow.com.au/business/watco-wins-cbh-group-rail-contract/story-e6frg2s3-1225970413752 Watco wins CBH Group rail contract
  14. http://www.theaustralian.com.au/business/us-group-wins-cbh-contract-from-qr-national/story-e6frg8zx-1225970495346 US group wins CBH contract from QR National
  15. http://www.railexpress.com.au/archive/2010/december/15-12-10/other-top-stories/watco-wins-cbh-grain-rail-contract Watco wins CBH grain rail contract
  16. Book: Clark, Peter. An Australian Locomotive Guide. 2012. Rosenberg Publishing. 9781921719554. 312.
  17. https://www.cbh.com.au/media-centre/news/2012/february/new-wagons-hit-the-western-australian-shore.aspx New wagons hit the Western Australian shore
  18. http://www.railexpress.com.au/archive/2012/august/august-29th-2012/other-top-stories/wa-grain-industry-takes-ownership-of-first-rail-fleet WA grain industry takes ownership of first rail fleet
  19. http://www.world-grain.com/News/News%20Home/World%20Grain%20News/2013/4/CBH%20Watco%20mark%20anniversary%20of%20moving%20grain%20on%20rail.aspx?cck=1 CBH, Watco mark anniversary of moving grain on rail
  20. https://www.cbh.com.au/media/305738/receival%20site%20map.pdf Receival Site Map
  21. http://www.businessnews.com.au/article/ERA-to-mediate-CBH-Brookfield-rail-talks ERA to mediate CBH, Brookfield rail talks
  22. http://www.world-grain.com/News/News%20Home/World%20Grain%20News/2012/4/CBH%20Watco%20rail%20arrangement%20starts%20early.aspx CBH, Watco rail agreement starts early
  23. http://www.farmweekly.com.au/news/agriculture/cropping/general-news/cbh-grain-wagons-go-to-work-early/2512313.aspx CBH grain wagons go to work early
  24. http://www.merredinmercury.com.au/story/228688/first-train-runs-from-merredin/ First train runs from Merredin
  25. http://www.aurizon.com.au/Downloads/Aurizon%20Annual%20Report%202013.pdf Annual Report June 2013
  26. https://www.cbh.com.au/annual-reports/2012/index.html#/16/ Annual Report September 2012
  27. http://au.news.yahoo.com/thewest/countryman/a/20451719/cbh-pushes-market-limits/ CBH pushes market limits
  28. http://www.railexpress.com.au/archive/2013/november-2013/november-6-2013/cbh-brookfield-off-to-era CBH, Brookfield off to ERA
  29. http://www.erawa.com.au/cproot/11988/2/Consultation%20-%20Brookfield%20Rail%20Pty%20Ltd%20Floor%20and%20Ceiling%20Cost%20Determination%20-%20Invitation%20for%20Public%20Submissions.pdf Consultation Brookfield Rail Pty Ltd Floor and Ceiling Cost Determination
  30. MotivePower Roundup Motive Power issue 115 January 2018 page 106
  31. https://web.archive.org/web/20180313145042/http://www.farmweekly.com.au/news/agriculture/cropping/grains/diesels-expand-cbhs-loco-fleet/2756804.aspx Diesels expand CBH's loco fleet
  32. https://web.archive.org/web/20210806015842/https://www.aurizon.com.au/news/2021/aurizon-and-cbh-sign-long-term-agreement-for-wa-grain-haulage Aurizon and CBH sign long-term agreement for WA grain haulage
  33. https://web.archive.org/web/20210813041840/https://www.railexpress.com.au/cbh-chooses-aurizon-as-rail-services-provider/ CBH chooses Aurizon as rail services provider
  34. https://web.archive.org/web/20210618104539/https://www.farmweekly.com.au/story/7208272/cbh-seeks-a-rail-new-deal/ CBH seeks a rail new deal
  35. Grain contracts change hands in Western Australia The Railway Magazine issue 1447 October 2021 page 106
  36. Web site: LANSA – CBH uses LANSA to collect harvest estimates from 10,000 growers. 2008. 2008-05-29. 15 May 2010. https://web.archive.org/web/20100515125233/http://www.lansa.com/casestudies/cbh.htm. live.
  37. Web site: ABC Rural – Sparks fly at Co-operative Bulk Handling AGM. Australian Broadcasting Corporation. 2005. 2008-08-03. 10 November 2012. https://web.archive.org/web/20121110072102/http://www.abc.net.au/rural/wa/stories/s1345522.htm. live.
  38. http://www.theaustralian.com.au/business/grain-growers-cbh-back-to-best-after-record-wa-harvest/story-e6frg8zx-1226808812937 Grain growers CBH back to best after record WA harvest
  39. http://www.weeklytimesnow.com.au/commodities/grain-and-hay/western-australian-bulk-handler-and-the-nations-biggest-grain-exporter-cbh-group-posts-a-nearrecord-profit/story-fnker6ee-1226816520321 Western Australian bulk handler and the nation's biggest grain exporter CBH Group posts a near-record Profit
  40. Web site: WA farmers deliver record grain harvest. Jenne Brammer. 3 February 2017. 4 February 2017. Albany Advertiser. Yahoo7. 3 February 2017. https://web.archive.org/web/20170203133224/https://thewest.com.au/business/agriculture/wa-farmers-deliver-record-grain-harvest-ng-b88358122z. live.
  41. In 1965 the maximum was reached of 305 sites –
  42. Web site: Sites and Ports Directory. 14 August 2021. 14 August 2021. https://web.archive.org/web/20210814145626/https://www.cbh.com.au/contact/sites-and-ports-directory. live.

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