Milling & Baking News - November 16, 2010 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS NOVEMBER 16, 2010 / MILLING TECHNOLOGY Bimbo to acquire Sara Lee fresh baking business for $959 million Siemer adds a 'showplace' Company begins operations in highly automated 'C' mill at its Hopkinsville, Ky., complex, increasing milling capacity at the site to 16,000 cwts. Story on Page 42 LATE NEWS Hostess Brands fined $274,500 by OSHA SCHILLER PARK, ILL. - Interstate Brands Corp., (now renamed Hostess Brands, Inc.), has been fined $274,500 by the Occupational Safety and Health Administration (OSHA) for 20 alleged safety violations, including failing to train workers and protect them from safety hazards. OSHA said Interstate Brands failed to properly train workers who operate powered industrial trucks or protect workers from electrical shock hazards and dangerous high-speed rotating equipment at the company's Schiller Park facility. A spokeswoman for Interstate Brands said the company takes safety seriously and looks Continued on Page 8 HORSHAM, PA. - Grupo Bimbo S.A.B. de C.V. has agreed to acquire the North American Fresh Bakery business of Sara Lee Corp., Downers Grove, Ill. The transaction, which is subject to regulatory review, would combine the largest and third largest baking companies in the United States, as measured by annual sales. Grupo Bimbo said it will pay $959 million for the Sara Lee fresh baking business and predicted a closing date in the first half of calendar 2011. The seller described the deal as "another example of Sara Lee pursuing shareholder value." According to Bimbo, the transaction will leave its U.S. subsidiary Bimbo Bakeries USA with 75 baking plants in 31 states, serving the entire continental U.S. market with a network of more than 13,000 sales routes. The company's workforce will exceed 28,000. "This transaction demonstrates Grupo Bimbo's commitment and singular focus on baking," said Gary Prince, president of B.B.U. "Our goal is to build a U.S. bakery business that provides the highest quality products and best value to customers and consumers." Bimbo described the transaction as "highly complementary across product Continued on Page 10 U.S. wheat prices strong, volatile despite ample global supply WASHINGTON - Recent price strength and volatility in wheat and other commodity markets have elicited comparisons to 2008 when many grains set record highs, and last week's U.S. Department of Agriculture supply and demand data reflecting tighter wheat, corn and soybean stocks did little to dissuade those fears. New season's highs were reached last week at all three futures exchanges. December wheat in Kansas City hit a high of $8.21 a bu, up 21% from the recent low of $6.80ΒΌ and up 62% since June 1. Kansas City December last week ended down about 80c from the high. But current conditions are significantly different from that record year, analysts noted, and prices remain well below record levels. Still, prices for wheat and other commodities are up sharply from just a few weeks ago and have created a challenging environment for buyers of flour and other ingredients. "The main difference to 2008 is $147 crude oil," said Paul Meyers, vice-president of commodity analysis, Connell and Co., Berkeley Heights, N.J. Although crude oil prices have increased about 20% since the summer low in August, the current nearby futures price around $87 a barrel still is 40% below the 2008 high. "The wheat market is in a much Continued on Page 9

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Milling & Baking News - November 16, 2010