Milling & Baking News - October 9, 2007 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS OCTOBER 9, 2007 / Staley as Cargill c.e.o. brings culture change, profitability surge, growth in processing FEATURE Run of the mill? Not hardly Hal Ross Flour Mill helps rejuvenate milling science program at Kansas State University. Story on Page 43 LATE NEWS Flowers Foods to raise prices NEWTON, N.C. - Flowers Foods, Inc., Thomasville, Ga., plans to raise prices again in December following an increase of about 3.5% in August, George E. Deese, president, chairman and chief executive officer, said Oct. 4 at an analyst day at Flowers' bakery in Newton. Expected rising commodity costs for 2008 led Flowers to make the decision. Mr. Deese addressed the issue of consumers possibly choosing to buy brands that are less expensive. "The biggest fear is people will trade down," he said. "There's no evidence, absolutely zero, so far to show that is Continued on Page 8 Under Warren Staley's tenure as chief executive officer at Cargill, the company experienced growth unparalleled in its 142-year history by a number of meaningful measures. Still, asked in a recent interview what changes within the company during his time at its helm give him greatest pride, Mr. Staley, who retired in June, offered what could be viewed as a modest response. The initiative that "gave me the most satisfaction" was the implementation of a process that he said was conceived by Ernie Micek, his predecessor as Cargill c.e.o. Under what Cargill called "Strategic Intent," the company focused on shifting its purpose to becom- Staley ing a "global leader in nourishing people." The three-legged effort sought to change its corporate culture to ensure that its employees were capable of understanding and meeting customer needs and that customer needs then were met all the while seeking to "en- rich the communities in which Cargill people lived and worked." Mr. Staley said the initiative reenergized Cargill "beyond any of our expectations." He said the effort was "responsible for much of the financial success the company has enjoyed in recent years." This success has been anything but modest. When he joined Cargill in 1969 as a trainee, the company's worldwide workforce numbered 9,000 and its annual earnings totaled $10 million. When he retired this year, the employee count had risen to 158,000 and the annual profits were $2.3 billion. Fully three fourths, or $1.8 billion, of the earnings gain was achieved during his final eight years at the company, the period in which he served as c.e.o. In an interview published last week in Continued on Page 27 I.B.C. receives 30-day extension to settle with union KANSAS CITY - U.S. bankruptcy judge Jerry W. Venters on Oct. 3 gave Interstate Bakeries Corp. an additional 30 days to either strike a deal with its largest union or to develop plans for a possible liquidation of the company's assets. "We've been here three years and a few days on this case and another 30 days won't hurt a whole lot," Judge Venters said. "I hope everybody will lay their weapons down and give this thing a shot." Interstate Bakeries' deadline for filing its reorganization plan had been set for Oct. 5, but Judge Venters granted the Kansas City-based wholesale baker's request to extend the deadline to Nov. 7. Interstate initially had asked for the deadline to be moved to Jan. 15, but pulled back on that request on Oct. 3 after being unable to come to an agreement with the International Brotherhood of Teamsters, its largest union. Interstate Bakeries had received one general objection, from the Teamsters, and two limited objections, from JPMorgan Chase Bank, N.A., and the Official Committee of Unsecured Creditors, respectively, to its exclusivity motion. In its exclusivity motion and again in arguments to the bankruptcy court, I.B.C. reiterated its belief that the company's best alternative for maximizing value for all of its stakeholders is to emerge Continued on Page 12

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Milling & Baking News - October 9, 2007