High-tech milling in Toluca
January 01, 1994
by Teresa Acklin
Mexico's Grupo Industrial Bimbo ready to compete with U.S. flour millers.
Molino San Jorge, in the foothills of the Sierra Madre mountains, has been described as one of the most technologically advanced flour mills in North America. It stands at Toluca, a rapidly growing industrial town about 60 kilometers west of Mexico City.
Grupo Industrial Bimbo built the 400-tonne-per-day mill two years ago to help supply its four baking plants in the Mexico City-Toluca area. The plant was designed and equipped by Buhler Ltd., Uzwil, Switzerland, and construction was supervised by Buhler's Mexican subsidiary.
The San Jorge mill is the showpiece of Bimbo's flour milling business. The company also owns a mill in Mexico City and another in Veracruz, on Mexico's east coast. The total flour milling capacity of the three mills is 1,000 tonnes per day.
Bimbo, whose primary interests are in baking, is a relative newcomer to flour milling. It is Mexico's largest commercial bread baker, with an 80% share of the country's white pan bread market. It also is Mexico's second-largest producer of baked and salty snacks.
The company acquired its first flour mill in 1985, when it took ownership of Ralston Purina's Wonder bread and baked sweet snack business in Mexico. The Wonder assets included a flour mill in Mexico City.
But once it got its feet wet, Bimbo plunged into flour milling with enthusiasm. The Toluca mill was built a couple of years ago, and the Veracruz mill was acquired shortly thereafter.
COMPETITION UNDER NAFTA.
Bimbo executives said the company was committed to doing everything necessary to ensure that its flour milling business was competitive with mills in the United States. Under the North American Free Trade Agreement, expectations are that U.S. bakery flour increasingly will become available in Mexico, according to Bimbo.
“We think of flour as a commodity,” said Roberto Servitje A., president of Organizacion Altex, the support services division of Bimbo. “With NAFTA coming into effect, it soon will be possible for Mexican bakers to access bakery flour from the U.S.
“If our mills cannot import quality wheat and produce quality flour in order to compete with U.S. flour, they're dead,” Mr. Servitje said. “So, what we have been doing during the past few years is getting the technology we need to do the job right. We bought the best technology, we hired the right people to run the mills and we trained our employes well. We also established access to quality wheat from Canada and the U.S. With those elements in place, we think we can compete.
“From a corporate perspective, we are bakers before we are millers,” Mr. Servitje said. “If our baking plants can find good raw material at a good price, they'll buy it. It doesn't matter if we own flour mills.”
In terms of technology, Bimbo is taking all the necessary steps to ensure the competitiveness of its milling operations.
The six-story Toluca mill features the latest in Buhler milling technology, including 19 MDDK rollstands. The entire production flow is automated, from wheat reception, weighing, pre-cleaning and storage to milling, flour storage and bulk loading of flour into tanker trucks.
Only five workers and a superintendent work in the mill proper on each shift. Three workers staff the silo complex, and another three workers are in the laboratory. By comparison, Molino San Jorge has an administrative and clerical staff of 16.
Principal production functions are electronically controlled by an Allen Bradley Co. computer-control system. From a terminal in the superintendent's office, the entire production flow can be monitored and directed. If a problem develops anywhere in the production system, the mill is automatically shut down and the precise location of the problem is indicated for repair.
The mills in Mexico City and Veracruz are undergoing major upgrades. Once again, Bimbo has selected Buhler to provide milling technology, including the new MDDL double rollstands, which will be installed at both sites.
QUALITY WHEAT A CONCERN.
Technology is not the only criterion for competitiveness, according to Mr. Servitje. He said Bimbo mills must be able to access quality wheat from international markets.
NAFTA, which eventually will open the borders to free trade, will result in the near term in a 15% tariff on imported wheat. The tariff, which will be phased out in steps over 10 years, replaces a non-tariff barrier in the form of a Mexican licensing system. Mexican millers also are concerned about the fate under NAFTA of U.S. Export Enhancement Program wheat allocations to Mexico.
Access to Canadian and U.S. wheat at reasonable costs is especially important for Bimbo because so much of the company's flour requirements are for the production of pan bread.
“Mexican wheat is produced from varieties developed during the ‘Green Revolution,' when the emphasis was on quantity, not quality,” Mr. Servitje said.
The higher quality Canadian and U.S. spring wheats are necessary for the production of pan bread with the quality to stand up to U.S.-baked products, he said.
Also of concern are persistent problems with logistics.
“It costs about U.S.$16 to $18 a tonne to transport wheat from Canada to Veracruz,” Mr. Servitje explained. “Getting that same tonne of wheat from Veracruz to Mexico City costs us another U.S.$23 to $25. And sometimes when your grain is in port, there is no rail equipment to move it.”
While daunting, Mexico's infrastructure problem can be solved, Mr. Servitje said. He expressed optimism that privatization of the nation's railroads soon could be accomplished and that this process could help increase the efficiency and cost-effectiveness of grain transportation. That, together with improvements in port facilities now being privatized, could help ensure the long-term competitiveness of Mexican mills, Mr. Servitje said.