World Grain exclusive interview: Robert S. Satake

by Teresa Acklin
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Satake Corporation launches new initiatives to expand company's breadth.

By Morton I. Sosland, Editor-in-Chief

   A recent conversation with Robert S. Satake, chairman and chief executive of Satake Corporation at the group's headquarters in Hiroshima, Japan, revealed that while the family-owned group is primarily focused on the development of improved rice and flour milling equipment for sale into every part of the world, its targets are flexible enough that innovating in new milling and related machinery is being rivaled by several new initiatives. As a result of these undertakings and the broad role for the business being pursued by its chairman, a picture emerges portraying the Satake Corporation of the 21st century as much different from the group that currently dominates the engineering and manufacture of rice milling equipment in almost every region where rice is grown and that is striving to become a major factor in flour milling equipment manufacture and engineering.

   Those enterprises that depart from Satake's traditional role as a milling equipment innovator include a joint venture to build new flour mills in China; a collaboration with a large Japanese baking company aimed at introducing new types of bread and other baked foods; the development of a new “instant” rice for the Japanese domestic consumer market that is being extensively advertised; establishing an equipment manufacturing operation in Suchow, China; and a joint venture aimed at raising the quality of rice grown and marketed in China. The broad dimensions of Satake's participation in China are discussed in the accompanying article on page 32.

   And after discussing and explaining these initiatives, few of which would be associated with the typical equipment manufacturer, Mr. Satake recently made clear that other equally far-reaching enterprises are in the preliminary planning stages. He then proudly conducted a visitor on a tour of his new main office in Hiroshima and the adjoining research, engineering and research mill facilities, all extending over many acres and reflecting an expanding commitment to the core rice and wheat milling equipment business of the group.

   Mr. Satake leaves no doubt that he has learned a great deal about flour milling and flour millers in the six years since he announced in late 1991 that his company had decided to enter the flour milling machinery field. His original platform for entering into flour milling was the PeriTec system, which stems from the company's extensive experience with rice milling where the bran coating is removed from the rice kernel ahead of the polishing process. He and his engineers contend that bran removal leaving the whole endosperm is also a superior system of wheat milling as compared to the conventional rollermill process. Satake Corporation so far has entered into 15 flour milling contracts (see list on page 30) that involve either a new mill or a modernized plant that begins with the PeriTec system for removal of the bran from the wheat kernel.

   Not only has his relatively recent association with flour milling provided Mr. Satake with a few lessons about millers' slowness in accepting change, but he said he believed he had discovered a shortcoming among millers that has to do with how they enter into mill expansion and building projects.

   “A major problem created by flour millers around the world stems from their unwillingness to assign responsibility for the entire contract to the milling equipment supplier,” he explained. “By preferring to do things like basic building contracting, electrical contracting and mechanical installations themselves or through other independent firms, millers for the most part fail to capture all the advantages inherent in asking Satake or any other milling engineering specialist to carry out the entire job. Lost are many of the benefits that would be derived from having a single engineer and contractor apply all of his skills and technology to the project. The benefits are dispersed, and the gains from the project are lessened.”

   While Mr. Satake and his group's engineers have been committed to the PeriTec system as the “wave of the future” for flour mill construction, the amiable U.S.-educated Japanese executive, with his impeccable English, has been pragmatic enough to recognize that flour millers around the world are highly conservative in embracing new ways of milling flour. Thus, in 1991, Satake acquired the venerable Henry Simon and Robinson milling equipment businesses in Britain. The acquisitions provided him with an established line of well-known conventional milling equipment, which his company is marketing to millers wanting to modernize, expand or build new mills using conventional milling systems.

   Mr. Satake pointed out that when the PeriTec system for wheat milling was first unveiled, the milling process after the “new” bran removal was essentially the same as in a conventional mill. In the intervening years, he noted, he and his engineers have concluded that considerable modification is needed in the milling system that follows bran removal, with changes in rollermills as well as in roll corrugation and fluting to take account of how bran removal changes the entire process.

   This is only one of a continuing chain of technical breakthroughs that are being worked on by the large Satake engineering staff, and Mr. Satake expressed confidence that the equipment in the future will produce results superior to what has been achieved in recent years.

   “Our research focus now is on the whole mill, not just on how best to remove the bran layer,” he declared. “We are devoted to making significant modifications and improvements in the entire flour milling process, looking to discover significant cost savings as well as to reduce power consumption. I feel confident in predicting that considerable improvements are ahead in how wheat is milled into flour.”

   Along that line, Mr. Satake cited the technical collaboration under way with a leading Japanese baking company that is focused on how flour milled with the PeriTec system works in commercial baking. Mr. Satake said the goal was to prove the value of PeriTec flour in a wide range of baking applications as well as to conduct experiments with new baked foods that could be made only with PeriTec flour as well as the different sort of bran produced on a PeriTec mill. Furthermore, this collaboration is allowing the examination of how different milling systems affect flour used in commercial baking, especially for a company that bakes a very wide range of products.

   Of course, it was in recognition of the need for modifications of conventional milling and the problems that posed in milling engineering and design that led Mr. Satake to decide to acquire the Simon and Robinson businesses. When acquired, these companies had equipment manufacturing facilities in the U.K. Just recently, the decision has been made to concentrate equipment manufacturing at the corporate headquarters in Hiroshima, with the exception of specialized equipment made in Houston, Texas, U.S.; a facility in Thailand; and the planned start-up of equipment manufacturing in Suchow, China.

   “We felt that the U.K. particularly was not cost competitive in making milling equipment,” Mr. Satake observed. “While our Japanese labor costs might seem high, our engineers and our plant workers are very productive.

   “Our goal is to have our center of excellence in engineering and manufacturing here in Hiroshima,” Mr. Satake said. “We found that satellite manufacturing units in the United States and Britain were too difficult to control. At the same time that we are concentrating our engineering and equipment, we will be conducting business from 10 sales and service offices located in important markets around the world.”

      Advances from Research

   Mr. Satake takes great pride in the skills and training of the 300 university-graduate engineers employed in research and development at the Hiroshima headquarters. He pointed out that the company in an average year receives 200 or more patents on innovations in equipment.

   In a tour of the research and development facilities, Mr. Satake is quick to point out new and improved pieces of equipment where research has accomplished a significant advance in areas like process control; extremely fine sorting to remove extraneous materials like tiny pieces of glass from grain; continuous quality testing, monitoring and control; color reading and management, such as speck counters for durum semolina; and new uses for computers in enhancing the results of the company's systems. For instance, Satake developed a quick-starting and powerful motor that has important applications in such wide-ranging fields as transportation and distribution.

   The new paths that the company's extensive research capabilities may lead down are no better illustrated than by the introduction of its new instant rice product being marketed to Japanese consumers under the name, “Magic Rice.” A pre-cooked short-grain rice that cooks to the sticky consistency preferred by Japanese consumers, this product is envisioned by Mr. Satake as providing an opportunity for the rice industry to rival the great popularity of cup noodles, which have grown in recent decades to be the most popular fast snack of people in Japan and in other parts of Asia.

   Being offered in nine flavors, Magic Rice is ready for eating after 15 minutes immersed in boiling water. Mr. Satake and his wife are responsible for another version of the product available in a pouch, into which hot water may be poured to make the dish handy for travelers. The Satakes so missed Japanese-style rice on a recent trip to Europe that the pouch idea was brought forward.

   Magic Rice in a cup of 60 grams initially has been priced at retail at Y250, compared with cup noodles at Y100. The rice price is about to be reduced to Y180 as a way of stimulating demand, and advertising is being stepped up. Television advertising for the product originally was built around a Princess Diana look-alike, but the Princess' tragic death prompted a new theme being adopted.

   In addition to Hiroshima, Satake has research centers in Manchester, U.K., and in California in the United States. The group has maintained close relationships with several universities that are prominent in grain milling research, including Kansas State University in Manhattan, Kansas, U.S.; the University of Manchester, U.K.; and Hiroshima University in Japan. At Manchester, Satake funded the establishment of a grain milling research unit, and at Hiroshima, a grant of U.S.$10 million was made to encourage researchers doing basic work in fields of importance to grain milling.

   It was in 1996 that Manchester awarded Mr. Satake an honorary doctorate degree in engineering. Prior to that, the company's honorary chairman, Toshihiko Satake, Robert Satake's father-in-law, received a doctorate in 1988 from the University of Tokyo in recognition of his extensive research in advancing rice milling technology. In 1993, the senior Mr. Satake received another honorary doctor's degree from Tokyo University's School of Agriculture for his study of palm plants.

   His interest in palms, which led to one variety being named in his honor, becomes quickly evident to visitors to Satake's gleaming new glass-enclosed headquarters building. Near the lobby entrance on the first floor is an atrium housing an extremely rare collection of palm trees collected by Toshihiko Satake from many different parts of the world.

   Not so incidentally, the new headquarters building, which was occupied in 1994, was designed by Toshiko Satake, the senior Mr. Satake's daughter and Robert Satake's wife.

Satake Corp. contracted PeriTec mills as of October 1997

capacity in tonnes of wheat per day
LocationCompanyWheat productMill type*CapacityStart-up
BahrainBahrain Flour MillsSemi-hardB120mid-1996
CanadaHowson & HowsonDurumC200mid-1996
Howson & HowsonDurumC120mid-1997
UnspecifiedStarchN200November 1997
ChinaUnspecified joint ventureHard & softN120end 1997
EgyptBilbeis Flour MillSemi-hardN90end 1996
El MansouraSemi-hardN120early 1997
GrenadaCaribbean AgroHard & softC55early 1995
PhilippinesUnspecifiedHard & softN120end 1997
UnspecifiedHard & softN120end 1997
SpainEl CaballoSemi-hardB450end 1996
Flour Mill of Bay of CadizDurumC360early 1994
United KingdomGrantsSoftC120early 1996
United StatesAmber Milling Co.HardN200early 1997
*N = new PeriTec mill; B = PeriTec booster unit; C = PeriTec conversion