Panhandle Milling Co. is a small, independent miller in Dawn, Texas, U.S., 30 miles southwest of Amarillo and smack in the middle of the Texas panhandle. The mill, built in 1986 by Farmers Elevator, is state of the art and fully automated, producing 300,000 lbs (or 136 tonnes) of flour each day.
Until a recent packaging expansion, flour was bagged primarily in 25-lb and 50-lb bags for private label food service customers or sent out in bulk to wholesale customers — mostly bakeries and tortilla companies within a 500-mile radius, including the states of Kansas, Oklahoma, New Mexico and Arizona as well as Texas — and a little to U.S. Department of Agriculture food aid programs.
"We've really had to be creative and determined to make our name and get our share of the market," said Randal Robinson, Panhandle's general manager. "But we knew we needed to diversify to be effective and to continue to grow. We knew that, geographically, we had to carve out a niche for ourselves, putting emphasis on quality and consistency, with a priority on service."
Panhandle in 1997 decided to bid on U.S.D.A. food program flour in 5- and 10-lb bags. Panhandle Milling asked Minneapolis-based Codema, Inc. to find the right packaging machine for the job.
Panhandle and Codema decided on an ItalPack 50/5 packer, which can handle from 2 lbs to 10 lbs of flour in roll-top paper bags. Codema is the North American representative for ItalPack, based in Santarcangelo di Romagna, Italy.
"We've been very happy with that product," Robinson said.
Panhandle then decided to go after retail, co-packing accounts. Its first account involved packaging a retailer's private label flour brand in 5-, 10- and 25-lb bags, to be distributed by the retailer's warehouse 30 miles away.
Panhandle went back to Codema for a second packaging machine. Larry Yarger, Codema's project manager, explained, "Panhandle was looking for a packer to handle pre-made bags that would replace their old 25-lb bags that were pinch bottom and heat seal. These new bags also had to fit on a pallet, with no overhang on the sides, so that the distribution warehouse could easily stack the bags in pallet racking without damaging the ends of the bags and thus having to restack them at the warehouse."
Again, Panhandle and Codema chose ItalPack — this time a 50/10 packer, which has a range of 5 pounds at 32 bags per minute to over 30 pounds at 13 bags per minute.
Normal sealing for 5- and 10-lb bags is single fold, but 25-lb bags require double fold for strength, Yarger said. As a result, all of the 5-, 10- and 25-lb bags that run on the new equipment are double folded.
Codema helped with the initial set-up. At start-up last April, an ItalPack technician was on hand for fine tuning and to set up the machine's parameters.
Both ItalPack packers are arranged parallel to one another and can run at the same time into a conveyor, palletizer and stretch wrapper. Codema also provided an ItalPack bundler and shrink tunnel and an ImPac palletizer.
Panhandle had to utilize some warehouse storage space for the new packaging equipment. Robinson said the two ItalPack packers have worked out well.
"We decided on ItalPack because it fit our budget, number one," he said. The investment for the new equipment was about U.S.$800,000.
Because of the size of its operation, Panhandle did not need the more expensive, high-speed packaging equipment available on the market that can make its own bags and handle up to 100 bags per minute. Yarger said most of ItalPack's equipment is designed for slower packaging speeds, from 13 to 32 bags per minute. However, ItalPack is working on a packer in the 80 bags per minute range for 5-lb bags. The company has one installed in Kansas running 60 bags per minute on 5-lb bags, Yarger said.
Still, the ItalPack equipment is computerized and automated, requiring fewer employees to operate the machinery. At Panhandle, only three workers are needed to run the two packers; five when all the packers are running.
Robinson said the new packaging equipment is allowing Panhandle to diversify into the retail business. "Having this extra packing capability has really helped us climb that value-added ladder," he said. "That is so important for small, independent millers."
If there is a bottleneck currently, it is in the existing transfer system, Robinson said. "Flour is moving pneumatically to the packers and we can pack 12,500 pounds per hour," he said. "If we need to boost production — and we have the physical capacity to do 500,000 lbs a day by adding a few pieces of equipment — we'll increase our transfer volume to supply our new customers."
He added, "But if we do 12,500 pounds per hour every day for 10 hours a day, six days a week, that's a nice niche market for us. We've added another two and a half days mill run."
There is room in the plant to add two more packers, Robinson said — "if we get to the point where we've carved out that niche.
"But we're going to start slow. We want to walk before we run, and pay as we go. And, most of all, continue to keep our customers happy."