EARLIER this month, Cooperative Bulk Handling (CBH) Group opened the US$70 million Intermalt facility in Vietnam in which it has a 50% stake.
The venture diversifies CBH Group’s income stream and is an extension of its 50% share of Interflour which operates seven flour mills in Indonesia, Vietnam, Malaysia and Turkey, including a grain port terminal in Vietnam.
CBH group CEO Andrew Crane told Lloyd’s List Australia, “CBH invested in Interflour in 2005. Since then CBH has received total dividends of USD47.1 million.
“The opening of Intermalt marks a new phase of growth for Interflour which offers an additional gateway for WA grain into the Asian market particularly, in this case, Vietnam,” he said.
The CBH Group is Australia’s largest co-operative in the Australian grain industry, with operations extending along the value chain from grain storage, handling, transport, marketing and processing.
Owned and controlled by around 4,200 Western Australian grain growers, CBH Group’s storage and handling system currently receives and exports around 90% of the WA grain harvest.
The new Intermalt plant offers new opportunities for barley growers in WA, as it will source most of the feedstock from CBH Group but can also source from other countries where required.
WA growers delivered 1.5 million tonnes of malt-grade barley into the CBH receival network during the last harvest, however lower volumes are expected this year due to a poor growing season.
“Through our investment, CBH is able to diversify our income stream to assist in protecting revenues in years of a poor WA crop,” said Mr Crane.
“We’re also able to better understand downstream market dynamics and customer requirements, and gain exposure and improved marketing opportunities to the world’s fastest growing market for grains.”
The Intermalt plant can process 140,000 tonnes of barley every year, to produce 110,000 tonnes of malt to supply to local brewers. According to Intermalt, the beer market is growing at a rate of 6-9% annually in Vietnam alone.
Intermalt has already purchased 42,000 tonnes of malt barley, of which 32,000 tonnes came from the Kwinana and Albany port zones of WA. The shipment departed Australia in mid-June, and the barley cargo was combined with a wheat shipment for Interflour’s south-east Asian mills.
Given the ability to combine bulk wheat shipments with smaller barley shipments to Vietnam, CBH will be able to reduce transport costs moving forward.
“With a long-term view we can see strong growth in the Interflour business as a whole and future value for our growers over many years,” said Mr Crane.
From the print edition August 3, 2017