Milling & Baking News - September 6, 2005 - 15

K A T R I N A

C O V E R A G E

business interruption, but the company
was not able to estimate the scope of
damage or the timing of recovering the
costs of the property damage and business interruption caused by the storm.
Flowers Baking Co. of New Orleans
operated one bread line in a building
that dates from 1969. Flowers Foods is
uncertain of when the bakery and warehouses in the region will re-open because

'We will continue to serve the market,
but we anticipate the cost of doing so
will be extremely high.'
- George E. Deese, Flowers Foods
of anticipated water damage and a long
delay before utility services are restored.
In addition to the damaged warehouses,
some independent distributors of the
company's product have business interruptions, at least for the immediate
future, due to the storm damage and the
mandatory evacuation of New Orleans.
"We will continue to serve the market,
but we anticipate the cost of doing so
will be extremely high," Mr. Deese said.
"Although much of the marketplace currently is displaced, we are providing service to all areas that are accessible, with
product being delivered from our Baton
Rouge, Lafayette and other bakeries.
"Our reciprocal baking program,
composed of Flowers bakeries within
the region, already produced much of
the products sold in New Orleans and
the surrounding area. There will be costs
associated with re-opening the closed
bakery in Houston as well as extra shipping and handling costs to transport the
product to the Louisiana market. However, this temporary solution will allow
us to continue service to the territories
in Louisiana, Mississippi, and southwest
Alabama to which we can gain access."
The company's Miami bakery suffered
no damage when Hurricane Katrina

crossed South Florida late the previous
week, and there was no disruption to the
company's ability to serve the market.
Other Flowers bakeries in the storm's
path also escaped damage and continue
in full operation.
According to the 2005 Baking/Snack
Directory & Buyers Guide published by
Sosland Publishing Co., four other bakeries besides Flowers operate in New
Orleans. All four - Alois J. Binder Bakery, Inc.; Leidenheimer Baking Co.; Simon Hubig Co., Inc.; and Turnbull Bakeries, Inc. of Louisiana - were closed as
of the morning of Aug. 29 and none was
operational as of late last week.
Interstate Bakeries Corp., which operates bakeries in Alexandria, La., and
Birmingham, Ala., ramped up production
at its northern plants in advance of the
storm. Maya Pogoda, a spokesperson for
the Kansas City-based baker, said the company was able to close its production lines
at Birmingham in an orderly manner and
had no issues with any of its route drivers
making it safely out of the area.
The company's Birmingham bakery
remained closed as of Aug. 31 and
Ms. Pogoda said it remained uncertain
when operations would start back up
again. In addition to its bakeries, I.B.C.
was forced to close several depots in the
region, many of which remained out of
service as of midday Aug. 31.
U.S. fresh bakery production was disrupted at Sara Lee Bakery Group as well.
The company had two bakeries - in
Meridian, Miss., and Mobile, Ala. - that
were without power for a period of time.
The Meridian bakery had power restored
by late Aug. 31, while the Mobile bakery
had power restored on Aug. 31 only to
lose it once again later in the day.
In Meridian, power went out the
night of Aug. 29, returning the following evening. Matt Hall, a Sara Lee
spokesperson, said production resumed
in Meridian on the morning of Aug. 30.
"Yeast temperatures remained low
during the power outage which enabled

us to resume production relatively
quickly," Mr. Hall said of the bread and
bun bakery. "We sustained some minor
damage to the building's roof, but the
facility is fully operational."
The company's Mobile plant sustained only "superficial damage," Mr.
Hall said, adding that the company
hoped to have the facility operating as
soon as power was restored.
Mr. Hall said Sara Lee would use more
than 15 bakeries to reroute production
to support the affected areas. Bakeries
as far north as Rock Island, Ill., and
Omaha, Neb., will play parts in rerouting production, he said.
"This (rerouting) is a huge undertaking," Mr. Hall said. "There are many
logistical challenges in doing this, but
our field operations have come to the
forefront as they tend to do in these
natural disaster situations."
Adding a further challenge to the
situation, Mr. Hall emphasized the difficulties associated with trying to boost
production ahead of Labor Day and with
the start of the new school year.
"There is huge demand for bread and
buns," Mr. Hall said. "With that, there
are significant challenges in rerouting
distribution equipment." He indicated
that as shipments make their way to
the affected areas, fewer trays and other
packaging equipment is on hand to
handle the increased production needed
to meet that region's needs.
Sara Lee also sustained damage at four
of its five bakery depots on the Gulf coast,
Mr. Hall said. The company's depot in
Pascagoula, Miss., sustained only minimal
damage, despite being situated in an area
hit hard by the hurricane. Other depots
were not as lucky. Sara Lee's Gulfport,
Miss., depot suffered severe damage in the
office, but the dock is operational. He said
the company's two depots in the immediate New Orleans area - one in Slidell, La.,
and one in Harvey, La. - were expected to
be either a total loss or at a minimum out
of operation for some time. MBN

U.S.D.A. modifies sugar program because of Hurricane Katrina
WASHINGTON - The Farm Service Agency of the U.S. Department of Agriculture
announced Aug. 31 a modification to the 2004-05 sugar program because of the
"turmoil created by Hurricane Katrina."
The U.S.D.A. increased the 2004-05 Overall Allotment Quantity (O.A.Q.) by
225,000 tons, raw value, and announced early entry of 2005-06 refined sugar Tariff
Rate Quota (T.R.Q.), beginning Sept. 8.
"The catastrophic hurricane was the latest in a series of events that has severely
tightened the sugar market and threatened the domestic production of sugar containing foods," the U.S.D.A. said when announcing the changes.
"The actions taken today are intended to boost refined sugar quantities immediately available to ameliorate already-tight domestic market conditions, exacerbated
by the forced closure of two major sugar refineries by the hurricane," the Department
said. "U.S.D.A. is committed to provide an adequate supply of sugar to meet domes-

16 / Milling & Baking News, September 6, 2005

tic needs, within the bounds of the current sugar program."
The Imperial Sugar Co. refinery in Gramercy, La., and the American
Sugar Refining facility in Chalmette, La., both were closed in advance
of the storm. The two refineries produce about 5,500 tons of sugar daily.
The Imperial refinery and warehouse, located about 20 miles northwest of New Orleans, did not sustain substantial damage and internal
power was restored to the plant Aug. 30, the company said.
"Resumption of operations will be contingent on the ability of our associates to safely return to their homes, the availability of transportation
equipment and the ability to complete necessary repairs to the facility,"
said Robert A. Peiser, president and chief executive officer of Imperial.
The plant was expected to reopen over the weekend.
The American plant, located between New Orleans and the coast, was

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Milling & Baking News - September 6, 2005

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