Focusing on quality, innovation

by Arvin Donley
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Firmly established as a leading manufacturer of rice, wheat and maize milling equipment used in processing facilities worldwide, Satake Corporation continues to develop new technology and seek new markets for its existing products as well as expanding its reach into the biofuels industry.

The company said about 60% of its 2007 sales turnover of more than $500 million was linked to its core cereal processing business. But an increased share of its revenue came from optical sorting equipment (25%) and green/emerging technologies (10%), according to Satake Chairperson Toshiko Satake, with another 5% coming from what the company describes as "other sources."

World Grain visited Satake headquarters in Hiroshima, Japan in March 2008 and talked to Mrs. Satake about the company, its products and how it is positioning itself to meet the needs of a fast-changing global market.

Serving clients in more than 140 countries, Satake has always had an eye on penetrating new markets and expanding existing ones.

Mrs. Satake said the company sees tremendous growth opportunities in China and India, the world’s two most populated countries which are both experiencing significant economic expansion and therefore are demanding higher quality food products and the means to produce them.

"The Chinese market has large growth and, consequently, many newly founded companies are offering milling equipment and services," Mrs. Satake said.

"However, these companies have neither the technical facilities nor the know-how to continually improve machines and processes and as such are unable to help increase customers’ profitability.

Our challenge, therefore, is to build upon our existing customer base and provide existing and new customers alike with the full range of services and products to meet their needs."

To strengthen its position in China, Satake opened a production facility five years ago in Suzhou, China that manufactures the full line of the company’s rice processing and flour milling equipment.

The Suzhou operation also undertakes flour and rice milling plant sales, engineering and construction.

Mrs. Satake said having the manufacturing facility in China, with expatriate management, has allowed Satake to supply reliable machinery that meets Satake’s stringent quality requirements.

"This is still our guiding principle, and we think that through this we have gained trust in Satake products from our Chinese customers," she said. "Manufacturing spare and consumable parts in China have allowed us to provide short delivery times at competitive prices."

More recently, as part of its Asian strategy, the company established wholly owned local corporations in Thailand and India to take advantage of the recent free trade agreement (FTA) between the two countries.

In January 2007, Satake upgraded the status of its office in Bangkok, Thailand, which is now known as Satake International Bangkok Co. Ltd. (SIB).

Mrs. Satake said the main role of this office is to export equipment from Thailand.

"This enables us to better manage delivery dates with Satake Thailand Co. Ltd., our Thai production corporation, and build closer customer relationships in neighboring countries, mainly India, ultimately resulting in increased sales," she said.

The establishment of Satake Engineering Pvt. Ltd. in February 2006 in New Dehli, India allowed Satake to not only take advantage of the FTA, but to capitalize on local procurement opportunities and ensure closer ties with its customers in that territory.

In addition, Satake has expanded its sales and support in countries such as Brazil and South Africa, which has seen a huge rise in demand for high quality maize and wheat-based products.

Mrs. Satake said this has resulted in significant sales of the company’s corn (maize) degerming and flour milling technologies and equipment in that country.

She noted that as economies develop, interest increases in food that is high quality, nutritious and convenient to meet changes in people’s working patterns.

"Satake is not only a grain processing company, but also has the engineering capability to apply its grain processing expertise to other fields such as instant rice and noodles," Mrs. Satake explained.

"These rapidly developing countries are markets, which demand not just basic grain processing but also secondary processing."

Satake continues to be a dominant player in the global rice industry.

More than 70% of large-scale rice mills in Japan are equipped with some type of Satake machinery.

A whopping 98% of rice mills in North America use Satake equipment and the company also has installed equipment in the majority of rice mills in Asia (70%) and the Middle East/Africa (60%) as well as in 50% of Latin American mills, according to Satake.

In an attempt to gain an even greater market share, Satake is developing new technologies for "secondary processing."

While primary processing involves processing paddy to brown rice and then to white rice, secondary processing includes rice cooking, long-term preservation of cooked rice, and effective utilization of byproducts such as husks, bran and broken rice.

"We are developing new products for this expanding market," Mrs. Satake said.

"In recent years, we have designed technology to produce perfect rice that is rich in GABA (gamma aminobutyric acid) for health-conscious consumers.

These functional foods are widely recognized in Japan and we intend to

spread them overseas." Rice milling is an industry where taste expectations vary considerably by region. More than 90% of the world’s rice production and consumption takes place in the Asian region, and many of these countries are experiencing economic growth. "As these countries develop, the first step is to pursue increased quality, yield and productivity through mechanization and enlargement," Mrs. Satake said. "New systems to pursue safety, convenience and added value are installed as a second step."

Satake entered the flour milling market in 1991 with the acquisition of United Kingdom-based companies Thomas Robinson & Son Ltd. and Henry Simon Ltd., and it continues to be a leading supplier to the milling sector with a wide range of equipment.

The company adapted its rice processing technology for flour milling with optical sorters, destoners and other equipment that was originally developed for rice processing and is now being used in the wheat milling process.

In addition to selling conventional milling systems, Satake also offers the PeriTec milling process, which was developed in 1995.

The PeriTec process, which has its origins in rice whitening and polishing, increases the nutritive value of white flour by retaining much of the mineral element within the aleurone layer that is lost in conventional milling, Satake said.

"The flour obtained from a PeriTec system retains originally abundant materials without spoiling whiteness," Mrs. Satake explained.

"We can reduce pesticide residue, bacteria and mold adhering to the outer skin by removing the outer bran layers."

After some initial resistance to the PeriTec system by traditional millers, mainly because it produces flour with relatively high ash content, Satake said the system seems to be gaining popularity.

Mrs. Satake said a presentation by company representatives about the merits of debranning prior to milling at the 2007 International Association of Operative Millers Conference & Expo helped the system gain acceptance in the milling community.

"Sales of PeriTec systems continue to grow, and our installed base is currently around 70 projects," she said.

"PeriTec remains foremost in customers’ minds as a means to improve flour and semolina quality or to maintain quality at lower cost. We are currently seeing increased demand within the durum semolina sector."

Mrs. Satake mentioned that recent agreements have been signed to install PeriTec systems in mills in Tunisia, Morocco, Turkey, Italy, Algeria and Hungary.

"We have always maintained that PeriTec is another tool that millers can use, depending on their prevailing market conditions," she said.

"Those that have adopted this technology have done so for many reasons: quality, capacity, efficiency, lower grist costs, etc.

Some markets, particularly those that are ash driven, are not always suited to PeriTec, and it is this that has caused some problems."

Another example of Satake’s processing technology migration is the use of color sorters, primarily developed for rice and nut processing, in wheat and other grain processing applications.

Satake’s Alphascan range of optical sorters has been specifically developed for the flour milling industry, with the latest generation designed with higher capacities in mind.

"We believe that changes in flour milling will be gradual and incremental with the aim of improving efficiencies in throughputs and energy consumption," Mrs. Satake said.

"The raw material costs will drive our research in lower grist cost formulation and added value usage of all the grain components."

To this end, she said Satake is looking at ways to use the aleurone portion of the grain more effectively.

One of the newest and fastest-growing areas of Satake’s business is the biomass processing equipment unit.

In 2004, Satake installed two biomass gasification test plants — one at Satake headquarters and the other at the Hiroshima Environment Laboratory.

Another test plant was installed in 2005 at Suranaree University of Technology in Thailand.

"With the construction of the demonstration plant (at Suranaree) as a launch pad, we have already received numerous contracts and inquiries from ASEAN (Association of Southeast Asian Nations) members," Mrs. Satake said.

In February, Satake was awarded contracts to install equipment at three biomass gasification power plants in Thailand.

One customer is building two plants; the first will be completed in August and a second is scheduled to go online in March 2009.

Satake also is installing equipment for another customer that has begun construction of its biomass gasification plant, which is scheduled to begin operations in February 2009.

"We are promoting and supplying biomass gasification power generating facilities as an entirely new business sector within Satake," Mrs. Satake said.

"We gasify organic substances such as wild-growing trees and bamboo in order to utilize them effectively."

The company has also installed equipment at several domestic biofuels operations, including Japan’s first biogas facility (owned by Niigata) to use rice husks.

Satake has also expanded its reach in the grain ethanol market, installing corn (maize) fractionation pre-treatment equipment that uses Satake’s specialized grain processing technology at a series of facilities in North America.

To boost its research and development efforts, Satake opened the Crystal Laboratory in 2005.

The laboratory, which is located next to Satake’s head office in Hiroshima, is a "grain-only" facility that supports not only the development of processing machinery but also the accumulation of expertise on how to produce high value added processed products.

It includes laboratory facilities with analysis for DNA, microbiology, microstructure, chemical and physical properties.

Also at the Hiroshima site is Satake’s research flour mill, which has a 50-tonne-per-day capacity.

The company’s United States and European divisions also have full-scale grain processing facilities for testing and research.

Satake’s research efforts have paid off recently with the unveiling of its SNR range of roller mills, high-capacity (30-tph) Alphascan optical sorter, full color belt sorter, and the SBFB IncliTec bran finisher, which was on display at the 2008 IAOM Conference and Expo in May.

The company is also developing a new purifier, maize (corn) degermer and grain tempering system.

"These machines incorporate novel technology to further improve efficiencies," Mrs. Satake said.

"In addition to these, we are continually reviewing designs for our other core equipment such as aspirators, paddy huskers and polishers."

Although low-cost products have been released in recent years, particularly in the flour milling industry, and there has been pressure on equipment manufacturers to reduce prices at any cost, Mrs. Satake said her company will continue to be "a quality-oriented business and stay competitive by releasing innovative products."