Namilco operating 'at full throttle'
November 01, 2008
by World Grain Staff
In many ways, Namilco Ltd. (National Milling Company of Guyana Guyana) ) reflects the national and home economics of this agriculturally rich country of 750,000 people on the northern coast of South America.
From 1982-85, Namilco was forced to shut down when an authoritarian government banned flour and wheat imports and compelled citizens to consume only locally produced goods. However since the new government implemented its economic recovery program in 1988, Namilco has rolled at full throttle, producing the equivalent of 800,000 100-pound bags (36,000 tonnes) of flour per year at its mill in Agricola, which opened in 1969. That includes close to 10 million small packages per year, which accounts for most of the country’s flour.
In recent years, the mill has modernized and expanded capacity, and the company has ventured into small package sizes and brought out new products. The company has also begun exporting flour and has added an ISO 9001 and quality management program that is improving the performance, quality and qualityconsciousness of its 100 workers, which includes both company and contracted employees. Namilco said it expects to achieve ISO 9001 certification by the end of this year.
When the mill reopened in 1995 after the death of Guyana President Forbes Burnham, Namilco took major steps by then purchasing new roller mills and new electrical panels, increasing milling capacity by 20% and storage capacity by 27%.
Namilco then began purchasing U.S.-donated wheat from the Guyana government under the PL 480 food aid program for developing countries. However, since 2004, Namilco has bought wheat commercially as Guyana’s economy surpassed the required criteria for the PL 480 program. Today, the company buys U.S. and Canadian wheat through an affiliate of its corporate parent, Shawnee Mission, Kansas, U.S.-based Seaboard Corporation, which transports it in low-draft ships.
Seaboard’s wheat shipments complement its new rice venture in Guyana, called SeaRice Guyana Inc., in which SeaRice buys and exports rice on container ships to the Caribbean and Europe from a mill it owns in partnership with John Fernandes Ltd. and from 10 other mills in Guyana and neighboring Suriname (Dutch Guiana). Dave Dannov, president of Seaboard Overseas and Trading Group, said European consumers prefer the high-quality rice produced by those countries.
The two commodities — flour and rice — synergize Seaboard’s business presence in Guyana, benefiting both Namilco and SeaRice.
Namilco took a major step in 1999-2000, when it introduced small (1/2-, 1-, 2-, 10, 11.25-kg) package sizes. The company had traditionally supplied flour in only 100-pound (45-kg) bags which lasted one month for most families. Bert Sukhai, Namilco’s managing director, says shop owners repackaged flour from the 100-pound bags and made a good profit by selling 14 ounces to the pound, but sometimes at the expense of hygiene. In recent years, consumers have become more health conscious, grown children have moved to their own homes, and mothers have taken outside jobs, leaving less time to cook. Namilco saw the opportunity for smaller packaging and easy and quick-to-cook flour pre-mixes. Guyanese housewives quickly became aware of the benefits of small packages and convenient pre-mixes.
Aided by advertising and promotion, the public quickly accepted the small packages. Namilco purchased a Colombian Discovery packaging machine, then bought a second and has a third on order. The company today sells 18 products in nine package sizes, whereas 10 years ago it only sold two products in one package size (100-pound bags).
In 2007, Namilco filled 790,000 small packages monthly and in 2008 surpassed that average in just seven months with small packages now representing 40% of production. Seeing Namilco’s success, the Guyanese rice and sugar industries likewise introduced small package sizes.
Along with small packages, Namilco introduced its Maid Marian line of products that includes Roti Mix, Self Rising Flour, Harvest High Fiber Flour, Pholourie Mix and Wheat Up Breakfast Porridge. The company said it plans to release more pre-mixes under its Maid Marian brand.
Sukhai describes the pre-mixes as convenience foods for the busy housewife. "Guyana has two main ethnic groups: African and Indian," he said. "Indians traditionally make roti (thinly-layered, rolled-flat bread) from scratch. The Africans like roti and now have no difficulty making it by using our Roti Mix, which includes the proper leavening agents and our finest cuts of flour. You only have to add water and make. The housewives like the convenience and recognize the quality, touch and texture. The product is so popular that it’s hard to keep up with the demand, which has more than doubled in the last two-and-a-half years."
Likewise, Maid Marian Self Rising Flour makes it easy to prepare other popular Guyanese foods such as sadha roti (thicker roti), bakes (rolled dough, which rises when fried so the cook can put food inside), doubles (like bakes but thinner and eaten in two pieces like a sandwich), and dumplings. Another new product, Maid Marian Pholourie Mix (flour, ground peas and seasoning), is promoted by Namilco as "Just add water, mix and fry."
New products are emerging from Namilco’s laboratory to the market. Toasted wheat germ, cream of wheattype hot cereal, pesto mix, multigrain mix, and herb and garlic mix are being developed. The company is looking at cake and pancake mixes, but box packaging presents a constraint.
Namilco’s traditional lead product is Thunderbolt flour, designed for extreme mixing techniques and extended kneading. It is sold in ½-, 1- and 2-kg package sizes as well as 100-pound bags. Namilco adds vitamins and nutrients such as folic acid, and minerals such as iron, to Thunderbolt flour and other products, which Sukhai said the population needs for good health.
One-hundred-pound bags of allpurpose flour still account for 22% of Namilco’s production, going mainly to Guyana’s remote gold and diamond mining areas. The company is working to convert those sales to small packages.
For the health conscious, Namilco recently introduced whole-wheat and high-fiber flour for bakers. Sukhai says both have quality and freshness that offshore competitors cannot match. Namilco is also supplying flour for fried chicken batter to new Kentucky Fried Chicken, Popeye’s, Church’s and other chicken franchises in the capital city of Georgetown, saving the franchisors from importing.
EXPORTS UNDER WAY
In addition to expanding the Guyana market, Namilco has started exporting products such as Maid Marian Roti and Pholourie mixes and self-rising flour to Guyanese communities in the United States and Canada, and is looking toward selling to border towns in neighboring Brazil and Venezuela. Guyana and Brazil are working on a free trade agreement and are completing construction of a bridge at Lethem, in southwest Guyana, which will connect the rough road between Georgetown and Boa Vista, a city in northern Brazil about 100 kilometers from the border. Namilco will then serve as Boa Vista’s closest and cheapest source of fresh flour.
With the coming of the economic cooperation group, Caribbean Community and Common Market (CARICOM), trade in several vital commodities is becoming more aggressive. This especially holds true as regards flour coming from Trinidad and Barbados. NAMILCO has had to compete with this regional flour. Trinidad’s mills are able to produce their flour product at a cheaper rate due to the low electricity costs in that country. One of the three mills in Trinidad is governmentowned (51%). There has been concern raised that one or more of the regional mills may be dumping their flour product into Guyana. NAMILCO took this issue to the Government of Guyana and to CARICOM asking that they investigate any such dumping and put a stop to it if, indeed, it was true. Guyana has subsequently experienced less imported flour from the region. Nevertheless, Sukhai said Namilco supplies better quality and fresh, locally produced flour, and one-onone service to local stores and bakers that imports cannot match.
To improve its production process, Namilco has modernized its plant. Ralf Hemsing, the operations manager who comes from a milling background in Germany, guided the recent technical improvements.
The upgrades have included adding double high roller mills as well as a new horizontal batch mixer that makes a more homogeneous product. The company also added a new 3,000-tonne flat storage warehouse.
The old bagging plant was gutted and replaced with latest-technology Buhler bagging machines. Namilco said bagging at the plant has become more accurate by weight, more efficient and more hygienic. It is also more easily operated with fewer workers and is better ergonomically for workers.
An automated Buhler microwave water-addition system calculates the proper required moisture level to assure uniformity of wheat for milling and consistency in finished products. An automated ingredient feeder assures consistent flour quality with no fluctuations at any stage. New electronic scales and controls for real-time monitoring of mill performance make it possible to react quickly to problems.
In terms of trying to maximize efficiencies, Namilco faces several challenges, especially related to high wheat prices and high energy and freight costs. Guyana Power & Light’s rate, although subsidized by the government, is still high at 30¢ per kilowatt-hour. For relief, Namilco intends to self-generate its power. The mill has two 500-kilowatt diesel generators that can only power one part of the operation (such as the mill system or discharging a wheat ship). Namilco intends to add capacity to power the whole plant.
In an effort to hold down flour prices while world wheat prices were soaring, NAMILCO and Guyana came to an agreement whereby Guyana would subsidize the flour price by directly buying flour from NAMILCO to sell directly to consumers. The bakers were also given a subsidy by Namilco which was recouped from the government. This lower, subsidized price would hopefully be passed on to the Guyanese consumers. In an effort to further reduce the price paid by consumers, the government also provided trucks to transport the flour.
NAMILCO now plans to acquire trucks to provide for its own distribution of flour directly to its customers. The company hopes this will further bringdown the price of flour to the Guyanese consumers.
Because of the Port of Georgtown’s low draft and silt buildup, NAMILCO is only able to bring in low-draft vessels carrying wheat. In an effort to bring larger in ships, which should lower transport costs, NAMILCO has asked the government to dredge a channel to the Port of Georgetown. NAMILCO noted this would benefit not only it, but also other importers as well.
Despite the challenges, Namilco continues to play an important role in the health, nutrition, and culinary traditions of Guyana through its new products, quality and fresh products, new package sizes, plant upgrades, exports and close relations with the government, store owners, bakers and consumers.
Robert Seeley is an industrial writer specializing in the powder-bulk area. He can be reached at firstname.lastname@example.org .
We want to hear from you — Send comments and inquiries to email@example.com. For reprints of WG articles, e-mail firstname.lastname@example.org.