WEST PERTH, AUSTRALIA — The CBH Group has reached another key phase in its investigation into the best structure for its future with the unveiling on Sept. 14 to growers of a shortlist of three broad models, all retaining cooperative principles.
The models are being presented to growers by CBH Group Chairman Neil Wandel and Chief Executive Officer Andrew Crane, at a series of meetings throughout the Western Australian wheatbelt which began on Sept. 10.
Wandel said the first and second phases of the structure investigation — surveying members' views and assessing a full range of potential structural options — had led the board to the conclusion that CBH should remain a cooperative.
"For our members, the retention of our cooperative principles and member ownership were critical," Wandel said. "And, from a strategic perspective, there is plenty of evidence that co-ops can be as successful as any corporate model provided they are structured to adapt to their changing environment and to the needs of different members.
"We are very confident that a cooperative structure will not only enable us to compete against bigger international grain businesses but give us an advantage. It makes us different because we alone return all the value we create back to the same growers who do business with us rather than having to satisfy external shareholders."
The three broad models which have been shortlisted for further assessment are:
- A non-distributing co-op: Retains CBH's current tax-exempt status with value returned to members through competitive services and rebates.
- A distributing co-op, which allows distribution of profits to growers in the form of cash and/or share rebates.
- A dual co-op, which comprises two separate cooperative entities, one holding storage and handling assets and the other holding the remaining assets of the business.
Wandel said the CBH board and management would incorporate grower feedback as part of its continuing assessment of the three options to reach a preferred model. This is expected to occur in early 2011 although that could be influenced by the timing of a Federal Court decision on the Tax Office's appeal against CBH's existing tax-exempt status.