New mill in U.S.
October 01, 1996
by Teresa Acklin
U.S. companies Koch Agriculture and Fisher Mills establish joint venture to build new mill in Idaho.
Fisher Mills, Inc., Seattle, Washington, and Koch Agriculture, Inc., Wichita, Kansas, will join forces to build a new U.S. flour mill with a daily capacity of 91 tonnes, in terms of flour, near Pocatello, Idaho, the companies announced recently. The mill will be the first project of a 50-50 joint venture named Koch Fisher Mills L.L.C.
The project represents the entry for Koch into the flour milling business. Koch Agriculture is part of Koch Industries, Inc., the second-largest privately held company in the United States.
"Koch Agriculture feels fortunate to align itself with such a quality partner in an effort to improve our overall agriculture business and our ability to meet the ever-changing needs of our customers," Dean Watson, president of Koch Agriculture, said. "We expect great things from the relationship and look forward to expanding our business, both domestically and internationally, with Fisher Mills."
Koch, a company with wide-ranging interests in the oil and gas industries, first entered the agricultural sector in 1991 with the purchase of two separate U.S. grain companies. Assets acquired included 12 country elevators in southern Idaho, and Koch also has a trading office in Rupert, west of Pocatello, and an elevator in Moreland, north of Pocatello.
Last year, the company reached an agreement with Kice Industries, Inc., Wichita, giving Koch exclusive marketing and operating rights for the K.S.U. Mill in several countries and non-exclusive rights in most other parts of the world. The Idaho facility will be a K.S.U. 2000 mill.
According to Terry Barrans, president and chief executive officer of Fisher, several factors make the joint venture with Koch a good fit.
"We buy a lot of grain from them currently for our operations and know them well," he said. "This project will take advantage of the Koch facilities in Idaho.
"We also thought it would be a good fit from the point of view of their wheat handling and millfeed merchandising skills together with our flour marketing and mill operations skills." The flour milling operation will be run by Fisher, Mr. Barrans said.
Fisher, the 12th-largest flour milling company in the United States, has already installed K.S.U. mills at three U.S. locations. "We're the milling company with the most experience with the Kice short flow system," Mr. Barrans said. "We know what kind of flour they produce. We know what kind of customers best fit the parameters of the short flow mill."
Mr. Barrans said a strong market existed for the flour that would be milled at the new facility.
"We believe that the capacity is already spoken for," he said, adding that the mill is "not dedicated in the sense of a particular customer."
Like Mr. Watson, Mr. Barrans said he expected to build on the companies' relationship. "We see great potential in serving our traditional domestic markets, as well as expanding internationally." While he said that discussions had taken place on further Koch Fisher Mills ventures, Mr. Barrans declined to comment on what projects were under consideration.