World Grain -- December 2015 - (Page 8)

FROM THE EDITOR-IN-CHIEF Milling differs from Warren Buffett W hile quite a few exceptions may be cited, it is not overreaching to deVFULEH JOREDO ÀRXU PLOOLQJ DV DQ LQdustry that in most parts of the world operates within a business structure uniquely dedicated WR PLOOLQJ 7KDW LV GH¿QLWHO\ WKH FDVH DPRQJ most of the leaders of American milling, including those owned by corporations headquartered in other countries like Japan. In the Western Hemisphere, exceptions include a giant food company like General Mills, Inc. and businesses operating in different parts of global grain that have developed large milling holdings. Similar exceptions are noted in parts of Southeast Asia and Russia but these rarely occur in Western Europe and Africa. On balance, milling enterprises are now mostly devoted to JULQGLQJ ZKHDW DQG SURGXFLQJ ÀRXU 8QGHUstanding the reasons for this single-minded focus is important to understanding the industry. As one of the world's oldest industries, not MXVW LQ ÀRXU PLOOLQJ EXW DV DQ RSHUDWLQJ LQGXVWU\ ÀRXU PLOOLQJ KDV VHHQ PDQ\ GLIIHUHQW company structures. A half century ago, the industry saw many of its leading players become divisions of large conglomerates with as broad a base of businesses as could be imagined. Conglomerates acquiring milling companies was the principal factor. Another cause involved milling companies that themselves became active acquirers, sometimes taking on an amazing spread of businesses. The observation was often made in this era that relevance to the business of food was totally neglected in order simply to build size. In ways, the internationalization of the current strict milling focus KDVVLJQL¿FDQWSDUDOOHOVLQKRZZKROHVDOHEDNing evolved. Hardly anything symbolizes this focus on companies solely engaged in milling better than corporate creations in the past year. ArGHQW 0LOOV WKH ODUJHVW 86 PLOOLQJ FRPSDQ\ and also at the top of global milling, was created as a free-standing company by the merger of milling companies that had been part of Cargill, CHS, Inc. and ConAgra Foods. Going from being divisions of such large enterprises to a single milling operation represents an assessment that great advantages exist in operating in this manner. Similar initiatives may be 8 cited in other parts of the world. It has happened recently in Africa where a milling company headquartered in Nigeria as part of the largest sub-Sahara corporation was spun out as a new company separated totally from former DVVRFLDWHVLQFHPHQWDQGVXJDUUH¿QLQJ Many different reasons may be cited for the focus on milling that has gained broad acceptance. An important one is the demands of ZKHDWSURFXUHPHQWZKLFKFDQFUHDWH¿QDQFLDO risks not always understood by a corporate owner engaged in other businesses. Obtaining a supply of wheat of desired quality mandates purchasing skills that extend well beyond conventional ideas about buying basic inputs for a manufacturing plant. Logistics of successful milling have long been considered among the most complex of any business, where customers may be widely scattered as compared with mills built to secure a quality wheat supply while serving baking customers whose locations are driven by totally different considerations. Nothing spurs milling's consolidation and structure into highly focused entities more powerfully than the long-time FRQVROLGDWLRQRIODUJHÀRXUXVLQJFXVWRPHUV whether baking bread, making noodles or producing cake and cookies. Addressing milling's tendency to operate ÀRXU PLOOLQJ VHSDUDWH IURP DQ\ RWKHU EXVLness is prompted this year by numerous commentaries asking whether Warren Buffett and his Berkshire Hathaway conglomerate do not suddenly signal a different corporate direction. His buying this year of Precision Castparts for $37 billion and his earlier involvement in the creation of The Kraft-Heinz Co. DVDKLJKO\GLYHUVL¿HGIRRGFRPSDQ\VLJQDOHG rejection by this highly revered investor of any hesitancy he might have about building a totally disconnected conglomerate. Mr. Buffett says he runs a sprawling conglomerate that is "constantly trying to sprawl further." Milling's sharp difference from such a business makes for a global industry that has gone in its own direction in a manner making great promise for the future. Morton I. Sosland Editor-in-chief Chairman and CEO Publisher Associate Publisher/ Managing Editor Sales Charles Sosland Dan Flavin Meyer Sosland Adam Ungashick EDITORIAL STAFF Editor-in-Chief Editor Associate Editor Editor European Editor China Consultant Designer Morton I. Sosland Arvin Donley Susan Reidy Holly Demaree Chris Lyddon Fengcheng Wang Brian Peterman PUBLISHING STAFF President L. Joshua Sosland President Emeritus Mark Sabo Vice-President and CFO Melanie Hepperly Audience Development Director Don Keating Design Services Manager Doni Conarroe Associate Design Services Manager Ryan Alcantara Director of On-line Advertising and Promotions Carrie Fluegge Director of e-Business Jon Hall Advertising Manager Nora Wages Advertising Coordinator Chelsea Bulmer Advertising Materials Coordinator Debbie Maniez Digital Systems Analyst Marj Potts Circulation Manager Whitney Hartman Promotions Marketing Manager Jim White WORLD GRAIN (ISSN 0745-8991) Volume 33, issue 12, is published monthly by Sosland Publishing Co., 4801 Main Street, Suite 650, Kansas City, MO 64112 U.S. Periodicals postage paid at Kansas City, MO 64108 U.S. and additional mailing offices. Canada Post International Publications Mail (Canada Distribution) Sales Agreement Number 40612608. Send returns (Canada) to Pitney Bowes International, P.O. Box 25542, London, ON, N6C 6B2. Printed in the USA. POSTMASTER: Send address changes to WORLD GRAIN, PO Box 324, Congers, NY 10920-0324. © Sosland Publishing Co. All rights reserved. Reproduction of the whole or any part of the contents without written permission is prohibited. WORLD GRAIN assumes no responsibility for the validity of claims in items reported. Sosland Publishing Co. is a division of Sosland Companies. Inc. Editorial and advertising inquiries should be directed to our world headquarters at 4801 Main St., Suite 650, Kansas City, Missouri 64112 U.S. Tel: 1-816-756-1000, Fax: 1-816-756-0494 or E-mail Requests for reprints of articles should be sent to or call 1-816-756-1000. December 2015 / World Grain /

Table of Contents for the Digital Edition of World Grain -- December 2015

World Grain -- December 2015
Table of Contents
From the Editor-in-chief - Milling differs from Warren Buffett
Calendar of Events
Second Oilseed Congress scheduled for Feb. 9-10
News Review - Tiger pulls financial support from Dangote Flour Mills
European Parliament rejects national GMO bans
Olam 3Q operational earnings up
Wilmar’s oilseed, grain segment earnings surge
Ardent Mills stake to stay with ConAgra Brands
Noble Agri reports loss in quarter
The Andersons reports loss on Grain Group decline
IGP Institute names interim associate director
Cargill’s new South Korean feed mill is its largest in the world
ADM opens two plants in China
GSFMO privatizes its flour mills
GrainCorp 2015 earnings down
Tiger Brands year-end earnings offset by international operations
Cargill makes executive leadership changes
Glencore agricultural production up
Grain Market Review - Oilseeds
Country Focus - Spain
Feature - Going from margin to mainstream
Feature - Record Turnout in Dubai
Feature - IAOM takes show to Indonesia
Feature - Indonesia's milling giant may expand
Indonesia in numbers
Feature - An end to the bear market?
Feature - Big turnout expected for IPPE 2016
Feature - Shaping the global feed industry
Feed Operations - Bucket elevator selection and installation tips
Supplier News
Product Showcase
World Grain Archive
Ad Index/Reader Information Form International Faxback Program

World Grain -- December 2015