A 'noble business'
Oct. 4, 2011
by Meyer Sosland
With innovations to its production and distribution systems, Quito, Ecuador-based Grupo Superior is working to expand its market share of the food and flour milling business in South America.
In a recent interview with World Grain at the Sosland Publishing Co. office in Kansas City, Missouri, U.S., Felipe Vergara, head of Grupo Superior’s industrial division, discussed the family-owned company’s recent technology updates, the reasons for them, the advantages they have given the company and the market that Grupo Superior serves.
Felipe Vergara’s father, Jaime Vergara Jaramillo, who founded the company 50 years ago and is still the company’s chairman, thinks that feeding the people of Ecuador and the surrounding region is a “noble business.”
Grupo Superior is a conglomerate that specializes in providing food products from high quality grains, especially wheat. The company’s industrial division produces flour for making bread, biscuits, pastries and noodles for internal and external use. The consumer division produces biscuits, noodles, cereal powder and different kinds of snacks.
The company is one of the largest cookie producers in Ecuador, producing between 700 and 800 tonnes of cookies each month. Felipe Vergara said the company is Ecuador’s biggest pasta producer with about 1,000 tonnes of pasta sold monthly. Grupo Superior exports pasta, cookies and other snacks to Peru, Colombia, Venezuela and other countries in the region.
Grupo Superior has a variety of cookie and pasta brands. He said the company’s “Bienestar” pasta is the highest quality product it sells, and its “Amancay” brand has been popular with customers for more than 30 years. Grupo Superior produces around 20 different stock keeping units (SKUs) of cookies and a variety of salt crackers.
It is one of the largest flour milling companies and importers of wheat in Ecuador. “Our company last year imported 120,000 tonnes of wheat,” Felipe Vergara said. “It’s important to understand that the entire country of Ecuador imports around 450,000 to 500,000 tonnes of wheat a year.
The Ecuadorean wheat flour market is dominated by three big players — Grupo Moderna, Grupo Superior and Industrial Molinera — that have all together 80% of the market, the other 20% of the market is distributed among 13 smaller players throughout the country.
Beyond its own needs, Grupo Superior produces flour for a wide variety of customers from large multi-nationals to artisan bakeries.
“We have big customers such as Supan, which buys around 20,000 50-kilo bags per month. In other cases, we sell to small bakers who demand two bags of flour and are located in different parts of the country. We are also involved with the World Food Programme in providing cookies and everything to the schools through a welfare program with the government.” Felipe Vergara noted. Focused expansion
In recent years, the company has undertaken a strategic restructuring and updating of its production and distribution systems with an eye on expanding its offerings and the reach of its products.
A few years ago, Grupo Superior moved the milling equipment that was located at its facilities in Quito and Cuenca, Ecuador to its facility in the port city of Manta, Ecuador. The Manta facility has a total wheat storage capacity of 30,000 tonnes.
“We already had a silo facility there (Manta), and we had this sizable plot of land,” Felipe Vergara said. “It was the correct thing to do. We unloaded wheat there, we transform the wheat into different kind of flours, and then we transported the flour from Manta to our Quito, Guayaquil and Cuenca distribution and commercial facilities.”
Felipe Vergara emphasized the cost efficiencies that moving the company’s flour mills to Manta created.
“We spent around $800,000 a year in trucking costs to move the wheat. Strategically, Manta is the perfect place, because the bushels arrive at the port. Our facilities are located three kilometers from the port. We have the mill, the silos, and we have the flour mill in one location.”
Last year, Grupo Superior asked Uzwil, Switzerland-based Bühler AG to update the Manta mill and increase its capacity. The facility, which consists of two mills, had its 24-hour milling capacity increased to 300 tonnes of flour.
Bühler supplied Grupo Superior’s Manta facility with four double roller mills 1250/250, one single roller mill 1250/250, a Sirius plansifter with 10 sieve compartments, a Sirius 2 plansifter with two compartments, two purifiers, one bran finisher and one vibro bran finisher.
Grupo Superior also has a flour mill in Guayllabamba, Ecuador, which is part of a facility that includes a pasta factory and cookie factory. The Guayllabamba flour mill has a 24-hour milling capacity of 170 tonnes of flour.
World Grain learned that Grupo Superior is already planning an additional expansion at its Manta facility.
“We are planning to improve the Manta flour mill’s capacity at the end of this year. We are going to increase the facility’s daily capacity by an additional 150 tonnes of flour,” Felipe Vergara said. “We made a negotiation already with Bühler that will beat our own capacity. Following all of these expansions, Grupo Superior’s total flour milling capacity will be 620 tonnes per day.” Expanded opportunities
One of the key improvements to the Manta facility was the ability to mix flour to create a range of products its customers are requesting.
“The good thing about our facility is that we can mix additives into flour now so we can do many things. Regarding to our customers we are tailor-making flour for them. We developed the things that they need, so that’s a good advantage that Grupo Superior has in the market,” Felipe Vergara noted.
Grupo Superior has been working with Manhattan, Kansas, U.S.-based Engrain on its blending program. The program they have developed uses additives in place of flour to improve flour quality. Blending flour with additives has allowed Grupo Superior to go from nearly 100% Canadian Western Red spring to other blending options where they can blend more soft wheat and hard red winter wheat, and still give them a product that competes in the market with those products with higher proteins flours.
The ability to mix also enables Grupo Superior to utilize wheat of various quality and price levels. This has enabled Grupo Superior to lower its input costs. Grupo Superior’s big cost driver is input cost, and the blending has allowed them to use cheaper wheat on the front end. Consequently, the company’s margins have grown.
“Grupo Superior is importing some Russian wheat that will arrive in September and November of this year…approximately 10,000 tonnes,” Felipe Vergara said. “We got an excellent price. We will see what the quality is.”