Milling & Baking News - December 9, 2014 - (Page 28)

Industry Activities Wild, wild East: NAMA given 'tour' of Southeast Asia milling industry "The cultures in the region are PALM BEACH, FLA. - An industry that is only 30 years old, growing very diverse, which anyone enterat a rate of more than 7% per year ing the milling industry must bear and operating at capacity utilization in mind," he said. "It's especially rates as low as 30% in the recent past important if you are a Western-style was how flour milling in Southeast investor. "The middle class in Asia will Asia was described to members of the North American Millers' Asso- grow six fold in number over the next 20 years. It will increase by 50% to ciation. A profile of an industry dramati- 100% in Africa and the Middle East. That underlines what we are talking cally different from about in our part of the world - the milling in the Ameridevelopment of the middle class." cas was offered at the He estimated per capita flour conNAMA annual meeting sumption will grow to 64 lbs by 2020 by Greg Harvey, manin Southeast Asia, up from 37 lbs in aging director and chief 2010. executive officer, InNoting the absence of large multerflour Holdings Ltd., Harvey tinationals in the region's milling Singapore. Mr. Harvey spoke Oct. 24 during the general ses- industry, Mr. Harvey predicted sion of the NAMA meeting, held at there will be consolidation in coming years in many emerging markets The Breakers in Palm Beach. The milling industry that has worldwide. Offering a glimpse at the individemerged in Southeast Asia over the past generation followed an extend- ual markets of Southeast Asia, Mr. ed period in which flour into the re- Harvey said 52% of flour use in Ingion overwhelmingly was supplied donesia goes into the production of through flour imports. The growth noodles, 22% is used for bread and of a domestic industry was a result 10% apiece for biscuits and fried of the dismantling of a centralized foods. "Noodles are dominant, but bread model that had prevailed earlier, Mr. Harvey said. Under the old milling is where the growth is," he said. "As business model, governments would a company, we are strategically fobuy wheat for privatized mills. The cused on bread." As is the case in many parts of the businesses would give the flour they produced back to the government region, capacity utilization in Indoand would be paid by keeping the nesia is unimpressive but poised to rise. Mr. Harvey estimated utilizamillfeed. "This all changed after the Inter- tion at 52% in 2014, a figure that has national Monetary Fund came in and grown from 36% in 2010 and which called for deregulation," Mr. Harvey he said will grow to 88% in 2020, given the current 7.6% compounded said. Within the constellation of milling companies Indonesia's wheat flour business currently operating in Southeast Asia, Mr. Harvey described Interflour Noodles as "small to medium" in size. The company oper52% Consumer Pack (1kg) ates mills in Malaysia, 2% Vietnam, Thailand and The Philippines. Because Turkish flour imports Snack are another, sometimes 4% Fried foods disruptive, flour supply source in Southeast Asia, 10% Bread Interflour also has ac22% Biscuit quired a mill in Turkey. 10% Mr. Harvey described both the challenges and the attraction to milling in Source: Interflour Foods the region. 28 / December 9, 2014 Milling & Baking News annual growth rate of production. The increased utilization is premised on a halt to mill capacity additions. Mr. Harvey said capacity utilization at Interflour mills has been significantly higher than the industry averages. Overall, the company is expected to operate at 79% of capacity in 2014 across the region, versus an industry average of 52%. In the countries profiled, utilization rates in 2014 included 43% in Malaysia, 37% in Vietnam, 67% in Thailand and 60% in the Philippines. Annual growth rates in Vietnam, Thailand and The Philippines all are in the vicinity of 7% per year, Mr. Harvey said. As a result, wheat demand in the region will grow to 13.2 million tonnes in 2020 from 9.3 million tonnes in 2014, he said. Demand in Malaysia is projected to grow more slowly - an average of 3.4% per year. "Southeast Asia will depend on markets other than Western Australia going forward for their wheat supply as that country is nearly tapped out," he said. "The Black Sea is expected to make up the difference. The same is likely (in) the case of the Middle East and Africa." He projected Interflour alone will experience a 14.8% annual growth rate in wheat purchases between 2014 and 2020. In addition to predicting the entrance of multinational companies in Southeast Asia in the years ahead, Mr. Harvey said a shakeout of smaller companies is likely as well. He also said initial public offerings of milling companies are possibile in the years ahead. Sharing further details of the Interflour business, Mr. Harvey said the company currently has 6,500 tonnes of daily wheat milling capacity (equating to about 106,000 cwts of flour daily) and is looking to grow to 10,000 tonnes per day (150,000 cwts) by 2018 while becoming a leader in its markets. He cited projects the company has under way or on the drawing boards for a number of countries in the region. While multinationals may not be major players in Southeast Asia milling yet, Interflour's owner is hardly a /

Table of Contents for the Digital Edition of Milling & Baking News - December 9, 2014

Milling & Baking News - December 9, 2014
January-September flour output sets new record, rises 0.9%
Consumer Reports casts doubts on merits of gluten-free diet
Late News - Reading to double facility’s size
Table of Contents
News Comment - Finally, commodity relief for grain-based foods
Editorial - India agreement offers hope for W.T.O.
Late News
Luna shifting line of bars to gluten-free ingredients
Business - Fire damages Canada Bread baking plant in Ontario
Girl Scout Cookies enter digital age
Sosland Publishing relocating company headquarters
Cargill reaches settlement, to change labels in Truvia case
C.H. Robinson to acquire Freightquote for $365 million
Financial Results - Campbell Soup baking unit profits strong; U.S. business soft
Charges bog down Post profit; adjusted EBITDA up sharply
Aryzta revenue in North America grows through acquisitions
ADM growth plans include Wild and Brazilian oilseeds
Input costs, plant start-up costs hinder Weston Foods
People - Mayo Schmidt to join Louis Dreyfus as c.e.o.
George Deese to retire as executive chairman at Flowers
Ready-to-eat Cereal Update - Cereal makers seek fresh start
Regulatory Affairs - Air emission calculation for particulate matter: Flour
Industry Activities - Wild, wild East: NAMA given ‘tour’ of Southeast Asia milling industry
AIB names new director of food safety services innovation
Nutrition and Health - USA Rice Federation disputes latest arsenic report
Supplier Innovations
Ingredient Market Trends - Grain volume requirements for Canadian railroads extended
Ingredient Week
Marketplace Business Network
Ad Index

Milling & Baking News - December 9, 2014