Great Southern farmers were part of CBH study tour in Vietnam

Salmon Gums farmer Sam Horley (right), at the opening of the malting facility last week with Stephen Strange, Bruce Rock and Sam MacNamara, east Pingelly. Photo by Darren O'Dea.
Salmon Gums farmer Sam Horley (right), at the opening of the malting facility last week with Stephen Strange, Bruce Rock and Sam MacNamara, east Pingelly. Photo by Darren O'Dea.

A GROUP of local farmers were part of a CBH study tour to Vietnam last week that included the opening of the US$70 million Intermalt, malting factory.

WA grain growers are in the box seat to tap into the thirsty South-East Asian beer market following the opening of the malting facility  in the southern Vietnamese province of Ba Ria Vung Tau.

It is run by Intermalt which is  a subsidiary of Interflour that is an equal partnership between the highly-successful Indonesian-based Salim Group and the CBH Group.

The plant, which took just under two and a half years to construct, will initially produce 110,000 tonnes of malt a year but that is expected to double by 2019 as demand for malt in Vietnam continues.

The majority of the malting barley will be from WA and as part of the commissioning phase, the plant has already sourced 42,000 tonnes of barley, with 32,000 tonnes of that coming from the Kwinana and Albany CBH zones.

Farmers included Ashley Bowman (Grass Patch), Bill Bailey (Jerramungup), Bruce West (Lake King/Mt Madden), Fred Capper (Lake King), Mark Mudie (Ravensthorpe), Nils Blumann (Gibson), Sam Horley (Salmon Gums) and Steve Tilbrook (Mt Madden).

The Intermalt facility is adjacent to Interflour's Cai Mep deep water port and grain storage facility that is built on 27 hectares, providing easy access to barley shipments and giving the company a major competitive advantage over any competition considering entering the market.

Intermalt has positioned itself to quench Vietnam's beer consumption that is growing at an average of six to nine per cent over the past 10 years, with premium beers in most demand.

Vietnam is the 14th most populated country in the world, being home to more than 94 million people and beer accounts for 95pc of all alcohol consumed in the country.

The average consumption rate is about 36 litres of beer per year, per person, making it the biggest beer market in South East Asia and the third biggest beer market in Asia - only behind China and Japan.

This is in stark contrast to stagnant or declining beer consumption rates in developed countries.

The costs of producing beer in the region is also a major advantage.

Interflour Group chief executive and managing director Greg Harvey said more people moving from rural to urban areas was a key driver for the growth.

He said this has also increased consumption of other agricultural products as well and as more women in families were starting to work, they would have more income.

Mr Harvey said Interflour was proud to open up a new market for grain growers and offer its customers a quality product with reliability and consistency.

The malting plant has been uniquely designed to meet the challenges of processing malt in the tropics and includes all stainless steel structures.

The germination area has additional cooling capacity and can cool water and air as it is used, while the steeping house (that extracts compounds contained in malt) has small, conical steeps to increase the homogeneity of the malt and there is also a wider than normal kiln that has a thin grain bed with higher airflow.

"Intermalt will produce fine quality malt for the major breweries in Vietnam, as well as throughout South East Asia," Mr Harvey said.

"We have been working with our customers to ensure the highest standards are met and product specifications can be achieved."

Heineken, one of the world's leading breweries, has invested heavily in Vietnam and will be one of the major consumers of product from Intermalt.

Intermalt general manager James Kirton said the huge beer consumption in Vietnam put Intermalt at the forefront of providing locally-produced malt to the doorstep of breweries in the region.

"This means big opportunities to support our customers' businesses by providing just-in-time deliveries," Mr Kirton said.

"We were able to leverage off Interflour's bulk supply chain into Vietnam to make this investment really work."

CBH Group chairman Wally Newman paid tribute to the founding partners of the Interflour concept when he attended the Intermalt opening.

Mr Newman said the investment in Interflour 12 years ago was ground-breaking and the opening of the world-class facility signified a new phase of growth for the business as it moved into barley processing and expanded across South East Asia.

"As chairman of CBH I am honoured to be speaking on behalf of CBH and our investment partners in Interflour," Mr Newman said.

He said many WA growers were concerned about the dry growing season conditions that were presenting real challenges.

"These challenges serve as a pertinent reason as to why CBH and the Salim Group invested in Interflour 12 years ago,'' he said.

"It's a reminder why CBH is committed to investments along the grain supply chain, so that additional value can be captured and returned to the current and future growers, which certainly assists in years of low production.

"In line with this commitment, our involvement in downstream grain processing through Interflour has allowed us to diversify our income stream which has resulted in new demand for our growers' grain production."

Mr Newman said not only was the infrastructure impressive but so too the growth and opportunities it would create for CBH, its investors and growers.

"The opening marks a new phase of growth for Interflour as it continues its expansion across South East Asia in a challenging new chapter for WA grain growers who will now enter into the region's fast-growing beer market.

"The long-term benefits will come in many years, including growers who will become suppliers of malt barley to this facility."

Mr Newman said last harvest WA growers delivered more than 1.5 million tonnes of malt barley into the CBH receival network.

He said in the future much of that barley could be heading to the new Intermalt facility.

"CBH Group growers can look forward to this new venture that will generate value which can then be returned through our investment rebate scheme to lower growers' costs," he said.

Mr Newman said he was delighted that more than 40 WA grain growers were able to go on a study tour to Vietnam last week so they could see first-hand the opportunities available to them.