Corporate Profile: Cereal Industries Limited

by Teresa Acklin
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U.K. agribusiness group focuses on quality, efficiency.

   Whether grinding wheat into specialty flour, packing breakfast muesli or marketing feed and livestock, Cereal Industries Limited applies a consistent philosophy to its operations.

   “We are committed to quality, not only in products, but in systems and management, and in fact, all aspects of our business,” Ralph H. Richard, Cereal Industries chairman, said recently.

   Cereal Industries, a wholly owned subsidiary of U.K.-based Associated British Foods, was established in 1988 to combine A.B.F.'s agricultural, grain trading and milling divisions under one group.

   From its U.K. headquarters in Brentwood, Essex, Cereal Industries today oversees the operations of four principal companies: Allied Grain, Allied Mills, Westmill Foods and Fishers Group. Cereal Industries operates with a degree of vertical integration, although the majority of business is conducted outside the organization.

   In addition to quality, another cornerstone of Cereal Industries' philosophy is efficiency, which is applied to its group organization and to its individual companies. This focus resulted in the recent integration of Mardorf Peach, once the fifth Cereal Industries company, into Allied Mills and Allied Grain (see story on page 40).

   The dual emphasis on quality and efficiency is intended to position Cereal Industries and its companies effectively in new markets around the world, as well as to serve existing markets. Each of the four principal companies reflects this emphasis.

      ALLIED GRAIN.

   Established in the early 1980s, Allied Grain purchases U.K.-grown, combine-harvested crops and supplies seed, fertilizer and other inputs to farmers. The company maintains seven grain silos throughout England and Scotland; with these facilities and those of other group companies, Cereal Industries' total drying and storage capacity approaches 1 million tonnes.

   Allied Grain, through its network of 11 U.K. trading offices, and Cereal Industries' other companies purchase a total of about 3.5 million tonnes of crops annually, including milling and feed wheat, oats, oilseeds, malting barley, rye and pulses. Allied Grain sells to flour mills, including sister company Allied Mills, and increasingly, for export.

   With the integration of Mardorf Peach, Allied Grain assumed responsibility for all European grain trading, which includes importing significant quantities of milling wheat for U.K. consumption. Allied Grain also is responsible for the Thamesgrain Elevators export grain facility; Weston Shipping Agency; and Mardorf Peach N.V., a Dutch commodity trading subsidiary.

   Thamesgrain Elevators, a high-speed export grain handling facility at the port of Tilbury, can unload trucks at a rate of 1,000 tph and can load ships at the same rate. With a storage capacity of 100,000 tonnes, the facility accommodates ships of up to 9,000 dwt on its inner berth and ocean-going vessels of up to 35,000 dwt on its outer berth.

   Weston Shipping Agency services shipowners and charterers at all U.K. ports. The company specializes in the shipment and customs documentation of grain imports and exports.

      ALLIED MILLS.

   Allied Mills Limited originated in the early 1960s, when A.B.F. decided to integrate vertically by acquiring flour mills throughout the U.K. By 1962, the group consisted of more than 30 mills, most retaining their local identities.

   Since then, A.B.F. and Cereal Industries have made major investments in improved technologies to increase efficiency. Several mills were totally rebuilt, including most recently Kings Mill, Knottingley, Yorkshire. As a result, flour production has doubled in the last 30 years, even though the group now comprises only 14 mills.

   The mills operate 24 hours a day, most of them for seven days a week, and produce a total of more than 1 million tonnes of flour a year. Allied Mills offers more than 300 blends and grades of flour and accounts for more than 30% of the U.K. flour market.

   The group's products include white and specialty bread flours, brown and wholemeal flours, cake flours, culinary flours and confectionery mixes. Customers include the U.K. baking, food processing and retail in-store bakery sectors, as well as export markets.

   Allied Mills' commitment to quality is reflected in the fact that each of the 14 mills and the head office have received BS 5750/ISO 9002 quality certification. This international quality standard not only assures finished product quality, but applies quality management principles to other procedures, including production, hygiene and customer service.

   The Allied Mills group was the first in the U.K. milling industry to switch to unbleached paper sacks for its untreated wheat flours and brown and wholemeal flours. The unbleached sacks are considered safer for the environment than bleached sacks.

   Recently, Allied Mills expanded its focus outside the U.K. Through a joint venture, Allied Mills established a modern bakery in southern Spain. The operation, called Pan Ingles, produces English-style bread for both the expatriate market in Spain and Gibraltar and the indigenous market.

   Allied Mills also recently assumed certain functions of the integrated Mardorf Peach operation. Allied Mills now is responsible for trading in wheat gluten, small seeds and third-country wheat.

      WESTMILL FOODS.

   Established in 1988, Westmill Foods produces flours, rices, breakfast cereals, flour based pre-mixes, pulses, brans, wheatgerm, yeast and dried fruit. It also operates a food packing division for its own brands, as well as private labels, and for contract packing.

   Westmill Foods operates three facilities in the U.K., consisting of a rice mill in North Yorkshire, a flour mill in Hertfordshire and a packing plant in Cambridgeshire. Each site is accredited under BS 5750/ISO 9002 quality standards.

   The rice mill, which began production in 1991, sits near the River Ouse, a navigable waterway that enables cargo rice to be delivered by barge, as well as by truck. The site has a history of milling dating back to the 19th century.

   The rice mill uses the latest milling technology, including a computer controlled optic sensor to screen for discolored grains. Indeed, the mill relies on computer control for most of its processes, so that the mill is “almost unmanned.” The mill can process many rice varieties, including long grain, parboiled, basmati, brown and pudding rice. The mill also produces ground rice, rice flour and rice cones.

   The milled rice can be delivered sacked or in bulk, depending on customer need. Customers include the retailing and ethnic catering industries, where Westmill's Tolly Boy rice is the brand leader, according to Cereal Industries.

   Westmill Foods' flour mill produces top-quality flours ground to customer and Westmill-branded specifications. The Westmill-brand flours are sold for home baking, where their market share exceeds 10%, and for catering use. The flour mill also produces bulk and chapati flours, batter mixes and a line of pre-mixes.

   Westmill Foods' food packing operation handles a multitude of own-label foods for both the U.K. and export markets, as well as contract packing. The product range focuses on rice, pulses, breakfast cereals, muesli and semolina.

   Packing capabilities include form fill and seal pillow pack, block bottom bag and cartons. Quality control begins with monitoring all incoming ingredients and continues through on-line weight checking and metal detecting systems.

      FISHERS GROUP.

   This fourth Cereal Industries company actually comprises four separate businesses: Fishers Seeds and Grain, Fishers Nutrition, Yorkshire Country Feeds and Fifarm. These companies focus on the feed and livestock industries, as well as grain trading and seed processing. Both Fishers Seeds and Grain and Fishers Nutrition are BS 5750/ISO 9002 accredited.

   Fishers Seeds and Grain in North Humberside primarily serves northern England. The company offers numerous products and services to more than 2,000 farmers, including seed and fertilizer supply, grain drying and storage and crop marketing. Fishers also conducts field trials and laboratory testing of seed varieties.

   Fishers Nutrition, Yorkshire Country Feeds and Fifarm annually market more than 250,000 tonnes of compound feed, concentrates and vitamin supplements to the pig, poultry and cattle industries. Fishers Nutrition is the U.K.'s third largest supplier to the pig industry, and the company also offers extensive support services, such as herd monitoring and recording packages and animal health information.

   Fishers Nutrition also engages in livestock marketing, selling more than 600,000 pigs annually.

   Yorkshire Country Feeds specializes in poultry and pig compound feed manufacturing. A major expansion project, completed last year to meet growing demand, increased Yorkshire's manufacturing capacity by 100%.

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