‘Amazing achievement’: CBH Group opens $59 million Kwinana Fertiliser Facility to turbocharge market share

WA farming cooperative CBH Group has wrapped up construction of its $50 million-plus fertiliser facility at Kwinana, with plans to open the doors to farmers after accepting its inaugural urea ammonium nitrate shipment next month.

The project — CBH’s biggest construction project since the Kwinana Grain Terminal more than 40 years ago — is set to supercharge its foothold in WA’s highly competitive fertiliser market and allow it to sell and store liquid fertiliser for the first time.

CBH Fertiliser manager David Pritchard said the company was on track to achieve its goal of 15 per cent market share by 2033 and revealed it was eyeing a new fertiliser storage facility at Albany after opening a 20,000t capacity site in Esperance last April.

The massive Kwinana Fertiliser Facility project involved construction of a 55,000 tonne-capacity granular fertiliser shed and two towering tanks to store 32,000 tonnes of liquid fertiliser next to the Kwinana Grain Terminal it built in 1969.

One of the more interesting parts of the design included the construction of a new dedicated liquid pipeline — for urea ammonium nitrate — along the alignment of the existing terminal jetty.

From there, the 1.8km pipeline travels underground to cross Rockingham Beach Road and access the fertiliser facility.

The co-operative and chosen builder Kerman Contracting turned the sod on the historic project in January last year, with CBH chair Simon Stead then revealing soaring construction costs meant the facility would cost upwards of the $50m originally flagged.

At the opening on March 17, Mr Stead said the project was delivered on time and at a cost of $59m.

Mr Stead this was a good result and the “exciting milestone” would deliver significant value to the grain growers of WA.

“CBH’s new Kwinana Fertiliser Facility provides a new liquid offering, and bolsters our granular offering, across a wider catchment for the benefit of all growers,” Mr Stead said.

“Ultimately, it enables us to reduce our handling and freight costs through efficiencies, which can be passed on to growers through competitive prices.

“Increasing our fertiliser storage capacity will also improve consistency of supply for growers when they need it most.”

CBH has spruiked the project as a way to increase competition in the fertiliser market and reduce prices for farmers.

Original plans were for an 80,000-tonne granular storage shed and three tanks to store 48,000 tonnes of UAN, but the project was scaled it back a few months after it was announced.

It is understood CBH Fertiliser still hopes to build more storage at the site in the future, with plans to utilise a existing space next to the new storage facility to build more sheds or tanks.

The new facility was opened by WA Agriculture Minister Jackie Jarvis, Brand MP Madeleine King and Mr Stead at a special presentation on March 17.

Ms Jarvis said the facility would give growers security of fertiliser inputs at a competitive price.

She said the savings derived from increased supply chain efficiencies would be passed on to growers and boost profit margins.

“Grain production is WA’s most valuable agricultural industry, with the 2022 harvest expected to reach $10 billion in value,” she said.

“This extra fertiliser capacity at CBH will deliver greater flexibility to our grain growers, enabling them to purchase competitively-priced fertiliser as required and in response to seasonal conditions.”

Ms Jarvis said the investment was timely, with a recent ABARES report showing that despite an easing in input costs, fuel and freight costs remain relatively high in long-term averages.

“CBH has worked creatively across the supply chain to create these efficiencies and opportunities that benefit our growers and the grains industry,” she said.