World Grain - March 2007 - 14

newsreview
U.S. flour output reaches five-year high

U.S. sales grow at Gruma; company to up corn flour capacity

WASHINGTON, D.C., U.S. - Production of flour by U.S. mills in
2006 totaled 397,360,000 cwts, up 0.6% from 394,973,000 in 2005,
according to preliminary estimates released in February by the U.S.
Department of Commerce's Bureau of the Census.
Output was the largest since 2001, when it was 404,521,000 cwts
but it was off 23,910,000, or 5.7%, from the record 421,270,000
cwts reached in 2000. The 24-hour capacity at year end (OctoberDecember, 2006) was 1,487,000 cwts, down slightly from 1,492,000
a year ago.
Rate of grind in 2006 averaged 87.4% of six-day capacity, up from
86.2% in the prior year. Wheat grind in 2006 was 884,056,000 bushels, near ly the same as 884,101,000 bushels in 2005.
Flour output in the fourth quarter totaled 100,821,000 cwts, off
2% from 102,917,000 cwts in the third quarter and up 0.5% from
100,346,000 in the fourth quarter of 2005.
Semolina production in 2006 aggregated 31,334,000 cwts, a fouryear high and up 1.6% from 30,838,000 cwts in 2005. It was the largest since 2002 when it was 32,411,000 cwts.

MONTERREY, MEXICO - Gruma S.A. de C.V. posted fiscal year
sales growth of 13% for its U.S. subsidiary, Gruma Corp., and also
gave updates on its capital expenditure program on Feb. 21.
Gruma Corp. sales of NP16,121 million (U.S.$1.47 billion) for
the fiscal year ended Dec. 31, 2006, were up from NP14,327 million
($1.40 billion) in the previous fiscal year. Operating income, however,
dropped 22% to NP948 million from NP1,215 million.
Gruma S.A. de C.V. expects its capital expenditure program to be
about $250 million in 2007, with financing coming from its internal
cash generation and additional sales of Banorte shares throughout the
year. Most of the investment will be used for additional production
capacity and upgrades in Gruma Corp.; additional corn flour capacity
in GIMSA, another subsidiary, to supply Gruma Corp. in the U.S. West
region; and a new plant in Australia to integrate current facilities.
The capital expenditure program also will include additional corn flour
capacity in Central America and an entry to a commercialization and distribution process in Central America. Gruma S.A. de C.V. invested $70
million in its capital expenditure program in the fourth quarter of 2006.
Companywide, Monterrey-based Gruma S.A. de C.V. reported
sales growth of 10% in the year ended Dec. 31, 2006, to NP30,644
million from NP27,863 million in the previous fiscal year. Net income
improved 13% to NP1,568 million from NP1,393 million. Earnings
per share improved 11% to NP3.04 from NP2.74. Debt increased 8%
in the year to $600 million.
In the fourth quarter, sales volume fell 1% for Gruma S.A. de C.V.
despite net sales increasing 7% to NP8,226 million. The fourth-quarter
sales increase came after Gruma Corp. implemented price increases
in the first quarter and the third quarter. Gruma Corp. reported fourthquarter sales growth of 7% to NP4,223 million. Gruma Corp. fourthquarter sales volume dropped 3%, but the fourth quarter of fiscal year
2005 had one more selling week than the fourth quarter of 2006.
For the fiscal year, GIMSA had sales growth of 9% to NP7,388 million. Molinera de Mexico had sales growth of 1% to NP477 million, but
Gruma Venezuela saw fiscal year sales decline 3% to NP3,129 million.

425,000

Wheat flour production
(in 1,000 cwt)

415,000
405,000
395,000
385,000
375,000
2000

2001

2002

2003

2004

2005

2006

Source: U.S. Census Bureau

a
-

For more information, see Page 74.

March 2007 / World Grain / www.World-Grain.com

http://www.World-Grain.com

World Grain - March 2007

Table of Contents for the Digital Edition of World Grain - March 2007