The White Art

by Teresa Acklin
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Italian flour milling company carries family tradition toward the 21st century.

   For Antonio Costato, director of Grandi Molini Italiani, flour milling is not only a business, it's a family tradition the company calls the “White Art.” In the 1800s, Mr. Costato's ancestors sold flour from water-driven mills along the Po River to Napoleon's troops as they traveled the plains of northern Italy.

   Over the years, the family operations grew and eventually consolidated. Today, six generations later, Mr. Costato sells flour from a computerized mill on the Gulf of Venice to customers in East and North Africa, Eastern Europe and the Middle East.

   From its headquarters in Rovigo, Italy, G.M.I. operates four mills, and a fifth is under construction in Trieste. Together, the four operating mills grind about 600,000 tonnes of non-durum wheat a year, or nearly 10% of the Italian milling industry's annual non-durum consumption of 6.3 million tonnes.

   Italy's non-durum wheat production typically meets less than 50% of the country's total demand for that type of wheat. Consequently, G.M.I., which grinds only non-durum wheat, imports about 95% of its annual needs.

   French wheat comprises more than half of G.M.I.'s annual imports because of its quality, Mr. Costato said. Germany, Denmark and the U.K. together provide about 40% of needs. The balance is Canadian or U.S. high-protein varieties purchased for blending. In 1993, G.M.I. also imported wheat from Saudi Arabia.

   Three of G.M.I.'s mills serve the domestic market; the fourth, at Porto Marghera on the Gulf of Venice, produces flour for export. All of the company's administrative functions, financial offices and international activities operate from the main headquarters at Rovigo. Offices at each of the three domestic mill locations handle domestic sales and oversee about 60 sales agents around the country.

   In the domestic market, G.M.I. produces more than 50 types of flour and sells directly to bakery, restaurant and confectionery customers. It also reaches the home baking and catering markets through wholesale distributors.

   G.M.I. tests flour mixes every new-crop year and consults with customers on changing characteristics. The company also operates a pilot bakery at the Rovigo mill, where it conducts training courses for bakers.

   The domestic mills in Verona and Rome each have a daily capacity of 250 tonnes, and their total 1993 wheat grind was 110,000 tonnes. The third domestic mill in Rovigo has a daily capacity of 300 tonnes, and its 1993 grind totaled 75,000 tonnes. The Trieste facility will have a daily capacity of 600 tonnes after completion later this year.

   The Porto Marghera mill is G.M.I.'s largest facility, accounting for about 70% of the company's annual wheat use. The mill grinds about 400,000 tonnes each year.

   The mill is unique to Italy in that it is located immediately adjacent to its own port facility. According to the company, it also is the only mill in Europe that can load bagged flour of various sizes directly onto ships of up to 15,000 dwt, either container or conventional vessels.

   The Porto Marghera mill imports all of its wheat requirements and, because of its site, exports 100% of its flour production. Most exports are commercial sales, although about 10% are food aid shipments. Bagged flour typically is loaded by means of a connecting conveyor, which moves the bags from the warehouse to the ship.

   G.M.I.'s grain unloading system enables vessels carrying as much as 20,000 tonnes of wheat to unload directly to the mill's wheat storage silos. The silos have a total capacity of 70,000 tonnes; the mill typically carries large inventories to minimize disruptions from possible ocean shipping delays of its wheat imports.

   The mill structure itself was built in 1929-30 by private interests as part of a larger Italian government milling project along the Porto Marghera docks. The “dock of the mills” was developed because of its proximity to shipping channels, highways and rail lines.

   In addition to what is now the G.M.I. mill, the dock area includes three other grain processing facilities for oilseeds and barley, although two currently are not in operation.

   G.M.I. and the Costato family purchased the Porto Marghera facility in 1977. The mill retains much of its original character, with wide-planked wooden floors and heads of wheat sculpted at the top of its six-level brick facade.

   Operationally, the mill is a thoroughly modern facility. Totally rebuilt inside between 1990 and 1993, the plant contains the latest in equipment from Buhler Ltd., Uzwil, Switzerland, and is computerized.

   The plant has 40 roller mills, including Buhler MDDL eight-roller mills and MDDK four-roller mills, 11 plansifters, cleaners and electronic weighters. The storage silo, grain cleaning, milling and flour storage processes are monitored and controlled by computer.

   Mr. Costato and a team of merchandisers work from the Rovigo headquarters to buy wheat for the mill and to sell its flour production. Mr. Costato said because most of the wheat purchased was from countries within the European Union, stable prices eliminated the need to reduce price risk by hedging inventories in wheat futures. But G.M.I. uses currency futures to hedge the greater risks associated with currency fluctuations.

   Mr. Costato said he expected the export flour market to continue to expand. International trade liberalizations, particularly the evolution of the European Single Market and reforms under the General Agreement on Tariffs and Trade, should contribute to new market opportunities, he said.

   A more-open and competitive trade environment should benefit milling companies with modern, efficient operations, Mr. Costato said. But in spite of technology, good flour milling still requires traditional milling knowledge and experience. And he said G.M.I., as it moves toward the 21st century, would take care to preserve the traditions of the “White Art.”

ITALY: Wheat demand and supply

(Average 1988-1992, in 1,000 tonnes, excludes durum)
Wheat demand
(5,570 domestic, 730 export)
Wheat supply
Domestic production4,335
Source: British Cereal Exports/Grandi Molini Italiani