World Grain - February 2013 - 41

FEATURE: STEPPING STONE

The mill processes 500 tonnes of wheat
per day to give it a per annum production
capacity of 115,000 to 125,000 tonnes of
ﬂour per annum. The facility can store
40,000 tonnes of wheat, and it can store
2,000 tonnes of ﬂour. All of the mill’s
ﬂour is shipped to customers in bags.
The key components of the mill comprise storage capacity, cleaning and
grinding sections. Ghana has a moderate
climate so there is no need to have any
specialist climatic control equipment.
The six-story, 1,115-square-meter
mill was built deliberately spacious in
the event Olam decides to double the
facility’s capacity.
“For this new mill we have been working with a new supplier/mill contractor
from Turkey,” KC Suresh, president and
global head, grains, Olam International,
told World Grain. “By working with different mill contractors, we can keep our
options open for future contracts. It has
taken just 12 months from ﬁnalizing the
project details to commissioning.”
Istanbul,
Turkey-based
Alapala
Machine, Food, Industry & Trade Inc.
built the complete mill including the
steel structure building, warehouse, silos
and all the electro-mechanical works.
The electricity for the mill comes
from the grid, much of which is generated by renewable hydro-power in Ghana.
At the mill, Olam is also looking at a
rainwater harvesting project, which will
reduce the facility’s water dependence
by half. It should be completed before
the start of the next rainy season.
GROWING GHANAIAN MARKET
Olam noted that it currently has the
third largest share of Ghana’s wheat
ﬂour market, and that its goal is to soon
move up to second. Olam has a 15%
share, and it expects to reach 25% within a short period.
“In addition to our sustainability
goals, we have been very keen to develop a product whose quality is most
suitable for Ghanaian style bread-making, which is very different to western
concepts of what good ﬂour should
be,” Suresh said. “We have assessed lowww.World-Grain.com / World Grain / February 2013

cal tastes, and what quality means to a
Ghanaian baker, and adapted our operations to that end.”
Initially Olam started with so-called
English ﬂour, which is suitable for the
English style of bread. The by-product
of this is bran for animal feed. “Going
forward, we are going to produce ﬂour
more suited to French bread such as
baguettes, cakes and pastries,” he said.
“We are also looking at developing
whole-wheat ﬂour.
“All our ﬂour is targeted toward artisanal bakeries, varying from medium to
very small bakers. As of now, the retail
market for wheat ﬂour, both in pure and
blended forms, is insigniﬁcant.”
Olam estimates that Ghana’s per capita consumption of ﬂour is around 17-18
kg (22-24 kg per capita wheat) per year.
Suresh noted this puts Ghana 20% to
30% below per capita levels across SubSaharan Africa.
“Based on our rough assessment, the
current consumption for wheat ﬂour in
sub-Saharan Africa is around 22-24 kilos,” he said.
“With an increase in income levels
and demographic changes, the demand
is expected to grow a gradual 4% to 5%
per annum, but with a sustained marketing effort, it may even be possible to
reach 8% to 10% per annum growth.”
Olam is seeing a shift in Ghana from
traditional crops such as cassava, corn
or yam to wheat-based foods. Suresh
noted the underlying reasons could be
the following:
• Ghanaians are looking for convenience, as people are becoming more
mobile and unwilling to spend long
hours cooking.
• As incomes increase, people aspire
to eat more globally recognized food
such as wheat and rice.
• Wheat-based foods have also become more affordable due to strong
GDP growth.
• Wheat-based foods are mainly consumed by urban populations.
“Presently, most of the wheat consumption is in the form of bread (butter,
sugar and tea bread varieties), which is

consumed plain, with margarine or with
local curries,” Suresh said. “It can often
be eaten in out of home/mobile situations. Other wheat-based foods include
biscuits, pasta and noodles, and are eaten in smaller quantities.”
Olam sees itself as a key partner in the
sustainability of the areas it operates in.
“As with all of the business platforms
within Olam, our grains business encourages and supports several sustainability programs. For example, in Ghana
we are working with the bakery industry
to help it modernize, improving productivity and pricing,” he said.
“As an end-to-end supply chain
manager, Olam’s grain business is in a
unique position to be able to ensure that
processing happens close to end markets. This helps cut down on the environmental costs of transportation and
helps ensure local industry beneﬁts local populations with increased jobs and
food security.”
FIRST STEP
Olam said that its new Ghanaian mill
is aimed at making the country selfsufﬁcient in wheat ﬂour and signiﬁes
the company’s continued support for the
country where it is a leading player in
the cocoa, cashew, cotton, rice and sugar
supply chains and operates a packaged
foods business.
Olam Ghana employs over 500 people, and this number is set to increase
to nearly 1,500 in the next three years.
One-hundred will be employed at the
new wheat facility.
“Our end-goal in Africa is to build a
pan-African presence primarily through
greenﬁeld projects, while keeping our
options open for value acquisitions,”
Suresh said. “The Ghanaian mill can
be seen as a ﬁrst step toward this greenﬁeld strategy. In Nigeria however, we
chose to enter through the acquisition
of Crown Flour Mills, the third largest
wheat miller in the country.
“When seeking to create an asset,
acquisition is not necessarily the best
strategy as the acquired asset is often
unknown and can be difﬁcult to man41

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World Grain - February 2013

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