Recipe for success

by Arvin Donley
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With an output of nearly 1.5 million tonnes of flour, semolina and other end products every year and a leading domestic market share of 30%, Harinera Vilafranquina S.A. is a formidable presence in Spain’s flour milling industry. Headquartered in Vilafranca del Penedes, near Barcelona, Harinera Vilafranquina specializes in the production of a wide range of flours and semolina as well as the wheat trade. In addition, the company processes the semolina produced in its own mills into pasta.

Harinera Vilafranquina is a company founded on private capital, and is 100% Spanish and family owned. The property and management is currently in the hands of the second generation of the Vall family, although members of the third generation already participate and make a contribution. The company was founded in the 1950s by brothers Jose Maria Vall and Antonio Vall.

Josep Alemany, economic manager of Harinera Vilafranquina, said that when discussing the company’s rise to prominence over the past 30 years it is important to stress the absolutely crucial role its current president, Jose Maria Sola Vall (nephew of the founders), has played. He said Sola has overseen “the growth and expansion of the company and in its consolidation as the leading company in Spain and as one of the biggest companies in the sector in Europe.” He points to the start-up of the flour mills in Arévalo (Ávila) in 1988 and Cadiz in 1993 as important moments in the history of the company.

Harinera Vilafranquina has six mills in Spain, the largest ones being in Cadiz (24-hour capacity of 2,200 tonnes), Arevalo (24-hour capacity of 1,830 tonnes) and Santa Margarida i Els Monjos (24-hour capacity of 800 tonnes). The total daily processing capacity at the six mills is 6,000 tonnes.

“Our market share has been increasing in recent years, up to the point when we achieved 30 percent,” said Alemany. “As the different mills and/or their expansions have become operational, we have been fortunate enough to be able to use this increased production capacity and increase our sales. There is no secret; it is hard work, professionalism, passion and investment in technology and innovation in order to always adapt to the new needs of the market.”

Its most recent production capacity expansion occurred late in 2009 when the new mill in Santa Margarida i Els Monjos became operational. The €45-million ($59 million) facility features the latest generation of milling equipment from Uzwil, Switzerlandbased Buhler AG.

Alemany described the new mill as a “genuine model of productive efficiency, food safety, energy efficiency, and environmental conservation.”

“While Harinera Vilafranquina has modern and efficient mills in Arevalo and Cadiz, the mill in Santa Margarida i Els Monjos is considered our flagship,” he said. “One of its greatest innovations is the implementation of M.E.S. (Manufacturing Execution System) industrial software, an application which handles the processing and organization of the plant, providing optimal efficiency, productivity and competitiveness.”

The mill is highly automated with only two millers working per shift in the production section for safety and monitoring purposes.

Because the mill was built on a site that allowed only a limited building size, a space-saving design was needed. The precleaning section has two lines; one with a capacity of 200 tonnes per 24 hours for soft wheat and one with a capacity of 100 tonnes per 24 hours for durum. The durum precleaning system supplies the semolina mill (210 tonnes per 24 hours), built by Buhler in 1997, with raw material. The second cleaning stage for soft wheat has a capacity of 48 tonnes per hour and includes Sortex Z+4 optical sorters.

At the heart of the milling section are 11 double-high roller mills and 13 single roller mills, while at the end of the grinding process are Sirius plansifters equipped with Nova sieves.

The mill includes a special flour blending and mixing section with a capacity or 40 tph. In addition, a system was installed for the byproducts which allows for the production of 14 tonnes of bran pellets per hour.

The finished flour is transferred to the large storage bins or the holding bins ahead of the loadout section. Alemany said 15% of the flour and semolina produced at the plant is sold in bags and 85% in bulk, which closely reflects the company-wide ratio of 20% bagged and 80% in bulk.

“Thanks to our silos for finished products, which are equipped with a large number of cells to the micro and macro component deposits and to the automated and computerized system for blending flour, we are able to produce whatever flour or semolina our clients request,” he said. “Using 10 basic varieties of flour through our blending and dosage systems, we obtain the exact final product which our client requests.”

Harinera Vilafranquina features a varied clientele which includes producers of traditional baking and pasta, processed baking and pastry products, frozen pastry, sliced bread, biscuits, readymade meals, dried pasta, fresh pasta, couscous and more.

The location of the new mill will enable Harinera Vilafranquina to expand its market share in a different geographic area, Alemany said.

“The capacity and the new technology installed in the new mill not only makes it possible to replace two old mills which the company has closed in the towns of Vilafranca del Penedes and Alcañiz, it also makes it possible to grow in the northeast of Spain to achieve a market share which is similar to that which the company enjoys in the rest of the country,” Alemany said.

The main markets for the new mill are in the regions of Catalonla, Levante, Aragon and Balearic Islands in the northeast of Spain as well as parts of France, particularly for semolina, he said.

“Moreover, taking advantage of the proximity of our mill to the ports of Barcelona and Tarragona, we have mainly exported to countries which are on the Mediterranean Sea,” Alemany said.

He said most of the flour is transported from the facility by truck, although there is a railway branch line available to transport the flour and semolina by train.

Not only is Harinera Vilafranquina Spain’s largest flour producer, it is also its biggest exporter of flour and semolina.

“Our exports to other countries in the E.U. — particularly France and Portugal — have increased significantly,”Alemany said.

However, the company’s exports to non-E.U. countries have gradually decreased in recent years, as many of those countries have seen an increase in domestic milling capacity, he said.

Harinera Vilafranquina’s international market turnover is less than 10% of the company’s total turnover, according to Alemany, who added that the overall dropoff in exports “has been more than offset by the increase in our sales in the domestic market.”

Most of the wheat used at the mill is sourced in Spain, Alemany said, with durum wheat supplies mainly coming from the Aragon and Andalusia regions, and soft wheat coming many different areas of the country. However, in a typical year, Harinera Vilafranquina does import a small percentage of its wheat, particularly soft wheat, mainly from E.U. countries.

Alemany said the Spanish milling industry is generally in good health. There are still a large number of small mills using older technology. As in many other countries, the industry has seen consolidation and restructuring with a decrease in the number of mills as they start to become technically obsolete or are unable to adapt to the changing needs of the market.

“Probably, from our point of view, for some producers of the sector the necessary adaption of the businesses, resources and assets to the new characteristics and needs of the clients, and the necessary professionalization of the organizations have either not been dealt with or have been carried out late to some extent,” Alemany said. “This, in turn, may have been one advantage for other companies which have managed to fulfill these requirements, one of which is Harinera Vilafranquina.”

Over the years, Harinera Vilafranquina has made several important acquisitions to strengthen its position in the flour milling and pasta industries. In 1999, the company acquired Pastas Gloria, now called Oromas, S.A.

“This was a very positive vertical integration because Oromas’ pastas are the natural and principal use for Harinera Vilafranquina’s semolina,” Alemany said.

“We are very satisfied with the progress of Oromas in recent years, and proof of this is that we have decided to invest in a new pasta factory with a capacity to produce around 70,000 tonnes per year and which will be operational at the end of 2011.”
The company acquired Harinera Del Pisuerga S.A. and Guria S.A. in 2001 and 2006, respectively.

“The main assets of these two companies were their mills, which have enabled us to steadily grow and to sell our products in very competitive conditions, in the whole of the north of Spain, where our market share had not previously been so prominent,” he said.

Alemany noted that the addition of Harinera Del Pisuerga provided geographical and logistical advantages for supplying Spain’s main biscuitproducing firms. While in the case of Guria, Harinera Vilafranquina acquired “know-how and a great amount of prestige in the sector and the market.”

In addition to being a processor, Harinera Vilafranquina has also created a department that specializes in selling
grain, primarily durum.

“This is an additional business which makes use of our organization and professional staff’s capabilities and our production and logistical installations such as, for example, the storage silos and the docks for loading and unloading bulk containers,” Alemany said.

He said the company purchases more than 1.2 million tonnes of wheat per year for its own needs and exports up to 250,000 tonnes per year, mainly to semolina producers for pasta products in other E.U. countries.

“We think that the key to our success is that, unlike the other traders, we are also producers of semolina, and this obliges us to sell the wheat with added value (i.e.-properly classifying wheat in accordance with qualities, better conditioning and cleaning of the grain, etc.), which our clients doubtlessly appreciate,” he said.