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Countryman (Western Australia)
February 20, 2014
New CBH director to question investments
CBH is set for a boardroom showdown which could have major implications for its investments in South-East Asia and the Eastern States.
Newly elected director Rod Madden this week blasted the co-operative's investment strategy and said the board was wracked by in-fighting.
Growers voted in Mr Madden, who campaigned on the investment issue, at the expense of sitting director Clancy Michael.
The 321-232 poll result released on Monday is a strong signal many farmers are unhappy with the Interflour joint venture with Indonesian billionaire Antoni Salim and moves to invest in storage, handling and port infrastructure in NSW.
Mr Madden, a board member from 2006 to 2012, warned he would be asking hard questions about the investments and said CBH needed an exit strategy for the Interflour joint venture.
Most of the growers in WA have seen the investment into numerous businesses the flour mills, the Metro Grain Centre, Futuris shares, the Eastern States grain venture and none of have delivered, he said.
Three have clearly failed.
There is more benefit by ensuring the supply chain in WA is clear all the way from the farm gate to the consumer.
Mr Madden said he was not targeting the chairman's role but wanted to steady the board.
There has been a lot of in-fighting (and) there is a lot of animosity, he said.
My prime focus at board level is to steady the ship and make sure people get on, communicate and that governance is good.
CBH has posted net profits of $162.5 million and $131.7 million in the past two years, and a record profit of more than $165 million is expected in 2014 on the back of a record WA grain harvest.
Mr Madden said he understood CBH intended to spend up to $120 million at three sites Burren Junction, Moree and Narrabri to accumulate grain for the Newcastle Agri-Terminal.
Industry experts said an investment of that size could include locomotives and wagons, as well as up-country storage to service Newcastle, where CBH has an 18.9 per cent stake in the new port terminal.
CBH chairman Neil Wandel declined to comment.
Meanwhile, CBH and Brookfield Rail have reached an out-of-court deal in their legal battle over the terms and details of floor and ceiling prices provided under the terms of WA's railway access code.
The deal clears the way for the Economic Regulation Authority to approve or determine relevant prices by April 28.
It is believed CBH, which started action against Brookfield in the Supreme Court, will get most of the information it sought on the confidential basis demanded by the rail operator.
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