A fall 2017 celebration marking the addition of a new, C$36 million ($29 million) milling unit at Chilliwack offered compelling evidence that Rogers has more than weathered the storm. On Oct. 31, customers; representatives of Nisshin Flour Milling, Rogers’ Tokyo-based parent; employees and suppliers joined to mark the opening of a new flour mill equipped by Ocrim SpA, Cremona, Italy, and CETEC Cereals Technologies, Inc., Elkridge, Maryland, U.S. Also present were representatives of Miller Milling Co., Nisshin’s other North American milling business.
The success achieved over the last 13 years at Rogers in a difficult flour market appears to validate what the company’s former president, Vic Bell, said in 2005 about expectations that had been set by Nisshin since its Japanese parent acquired Rogers in 1989.
“They told us that Nisshin is a far-sighted company,” said Bell, who retired in 2017. “Nisshin encouraged us not to think in terms of one year or two but to think in 10- or 20-year terms.”
The value of this patient but determined approach to the milling business has transformed Rogers in the 29 years since Nisshin acquired it. At the time, Rogers was a niche, specialty miller with a single 2,200-cwt mill (daily production capacity) at Armstrong, British Columbia, Canada. After the acquisition, the company gradually raised capacity to 3,600 cwts before building the A unit in Chilliwack (60 miles east of Vancouver, 220 miles southwest of Armstrong), which now has daily capacity of 5,400 cwts. With the addition in 2017 of the 4,200-cwt B unit, Rogers Foods between its two locations now has 13,200 cwts of daily milling capacity — six times more than when Nisshin acquired Rogers.
Nisshin’s focus on the long term remains firmly in place in 2018, said Kelly O’Brien, vice-president, operations. O’Brien has been with Rogers for more than 30 years and has witnessed the full complement of changes that transpired since the Nisshin acquisition. He said this forward-looking focus was crucial as Rogers sought to build its book of business after beginning operations at Chilliwack.
The A unit was built with a flow aimed at providing the company the flexibility to produce many different grades of flour to meet the needs of a wide range of customers in Canada, the United States and overseas. Still, the company anticipated that large bulk customers would account for a large part of its production.
“We actually expected mostly large customers, with bulk shipments accounting for 75% to 80% of production,” O’Brien said. “It turned out very different, with 60% bagged and 40% bulk.”
While there are numerous positives in a diverse customer base featuring many small to mid-sized baking companies, O’Brien said the business mix created challenges as well.
“We needed more warehouse capacity because of all the sacked flour business, and we quadrupled the size of our warehouse (from 10,000 to 42,000 square feet) as part of the new project,” he said. “Even before the B unit was built, we added this storage space and installed a new four-line packing machine.”
The Haver & Boecker Integra unit packs 10-kg, 20-kg, 25-kg and 50-lb bags. The company’s Armstrong mill packs 2.5-, 5- and 10-kg, 20-kg and 50-lbs bags.
A particular emphasis of Rogers in the early 1990s was mid-sized baking companies.
“Rogers developed a software program called Sales Point, which allowed customers to go on line to see certificates of analysis,” O’Brien said. “If they want, they can look at the last 10 COAs.”
Another popular service was a system in which Rogers would monitor customers’ bulk bins remotely and would ship flour to keep the bins full.
Offering specialty products also has been a way to increase business at Rogers.
“Because of the Japanese influence, we produce specialty noodle flour for the ethnic market,” he said. “It’s a large part of our bagged business.”
More exports to the United States
Another change since the opening of the Chilliwack mill relates to flour exports. At the time the mill was opened, steady shipments to Asia accounted for a meaningful share of the mill’s production. In recent years, the export market for the mill’s flour has been modest, O’Brien said.
By another definition, though, export business has been increasing steadily — shipments to the United States, he said.
“We’ve expanded down the Pacific Northwest,” he said. “We haven’t depended just on the growth of the Vancouver market.”
Proximity plays a significant role in the company’s decision to reach toward the U.S. market for flour sales. Joe Girdner, president of Rogers Foods, said Chilliwack is geographically the closest mill to the Seattle and Portland, Oregon, markets, other than a single Grain Craft mill in Portland. Otherwise, the Rogers mill is competing principally with interior U.S. flour mills shipping flour to the Pacific Northwest by rail.
“For some of the smaller bakeries and also the bakeries that like flour delivered ‘just in time,’ we’re able to be the most effective in servicing those customers by truck,” Girdner said.
While bagged shipments have turned out to be a larger part of Chilliwack’s business than anticipated when the mill first opened, Girdner said bulk business has been growing and should eclipse bagged before too long.
“Though one other advantage we have here on the bag business is the business that’s farther away,” he said. “We’re able to take advantage of back-haul freight on vans that are hauling fruits and vegetables up from the Mexico and California market and are looking for a haul back into that marketplace from here.”
He said the flow of the second mill also is conducive to bulk business and complements the flow of the A unit.
“The first mill was built on more of a Japanese-style milling process where you can separate out multiple streams of flour,” Girdner said. “That’s what Kelly’s expertise is, blending those streams into the products that the customer is looking for (O’Brien was the 2017 Milling Operative of the Year). The second mill is not quite so stream-oriented — we have more double roll stands. It’s more of an American-style mill for, not necessarily straight run flour but closer to straight ground flour.”
While conscious of sensitive discussions currently under way between the United States and Canada regarding the North American Free Trade Agreement, O’Brien said the U.S. border has at worst been a psychological barrier for certain prospective customers.
“We do quite a business in the United States,” he said. “Prospective U.S. customers sometimes raise issues about the border, but we have had customers for years, and haven’t had any major issues at the border.”
Meeting the needs of specialty artisan bakers along the U.S. West coast has been a significant source of growth for Rogers at Chilliwack, O’Brien said.
“They need us to age their flour,” he said. “We do quite a bit of ‘clean label’ flour, getting rid of additives and treatments. We’ve cut back on additives generally.
“The majority of our business is still located in Canada, but that could change over the next five years as the population growth in the Pacific Northwest continues. It will also depend on a number of factors, for example, like railroad freight rates, etcetera. We’re in a competitive market with mills that are in the interior and shipping by rail, and we’re also very dependent on rail to keep us competitive on grain here, but we view this market as a market that will continue to grow.”
New sources for wheat
Girdner joined Rogers Foods six years ago and most recently was vice-president of logistics and procurement before he was elevated to president in May 2017. He also recently was the project manager for Rogers Foods’ milling operation expansion in Chilliwack.
A native of Iowa, Girdner began his career in the U.S. grain business with Peavey, but has been in Canada since 1990 and held grain merchandising and transportation positions with Richardson International, the Canadian Wheat Board and with the Canadian National Railway.
The varied background served Rogers well in dealing with the dismantling of the Canadian Wheat Board. In 2012, the CWB lost its monopoly on marketing western Canadian wheat. For wheat users like Rogers, that meant new sources in the private market for wheat needed to be found. The transition wasn’t a simple one, Girdner said.
“It was tricky because the Canadian delivery system for grain has changed quite dramatically,” he said. “Most of the grain companies’ focus is on their export terminals in Vancouver and on the East coast, and so we’ve had to kind of develop a new model.”
He estimated that 90% of the wheat milled at Chilliwack is shipped by rail, sourced both from the CN and the Canadian Pacific Railway. The mill is serviced directly by a short-line carrier — Southern Railway of British Columbia (SRY).
In addition to the challenge of the post Canadian Wheat Board model, Rogers also grappled in a number of years with grain delivery delays related by severe weather and serious car shortages.
“We had to be fast on our feet to make sure that the mill didn’t run out of wheat, and we still have our challenges as the railroads’ focus remains on exports and larger trains — hundred-car train business,” he said. “So we’ve had to be, as is the case with other grain users in Fraser Valley, creative with other transportation sources.”
While western Canada is most strongly associated with spring wheat, O’Brien said the Chilliwack mill produces between 45 and 50 stock-keeping units, grinding several types of flour — western red spring, hard white, hard winter wheat and organic wheat.
“Wheat protein content generally ranges between 11% and 15%,” he said. “Nisshin has helped us develop a blend of flour that makes ramen noodles, and we ship ramen noodle flours clear across the country and into the eastern United States to New Jersey.”
Inside the mill
To increase the company’s flexibility to produce flour to customers’ specifications Rogers bought dozens of additional grain bins of different sizes. To more individually meet customer needs, additives and treatments are added to contract specification when the flour moves to loadout.
“One base flour can turn into four different sku’s,” O’Brien said.
A dozen new grain storage bins with capacity to store 20,200 bushels of wheat apiece were installed with four interstice bins for wheat blending, each capable of holding 4,600 bushels.
Aggregate grain storage capacity at Chilliwack now stands at 460,000 bushels.
The mill has two grain pits, either of which can unload up to nine cars per eight-hour shift.
The cleaning house of the new B mill is automated (as is the A). The B mill features a color sorter helping ensure any off-color wheat will be removed from the stream.
The B mill features seven bulk flour bins with 2,200 cwts of storage capacity and eight bulk bins with 1,325 cwts. Five loadout bins hold 1,325 cwts apiece.
When the decision was made in 2015 to add a second unit at Chilliwack, the company solicited equipment suppliers to bid on the project. In the end, the company opted to retain Ocrim and CETEC. Ocrim/CETEC supplied the Chilliwack A-mill.
“We have been happy with our first mill,” O’Brien said.
Meridian Manufacturing, Inc., Lethbridge, Alberta, supplied flour and in-process bins. Other key players in the project included the contractor, Westpro Infrastructure, Ltd., Calgary, Alberta; electrical engineering, Berts Electric Ltd., Langley, British Columbia (Berts did the same work for the A-unit); equipment installation was handled by Mainland Machinery Ltd., Abbotsford, British Columbia.
Largely a turnkey Ocrim project, the mill features four double high and six single roll stands, two 8-section sifters and three purifiers. The cleaning house features a Cimbria color sorter. The mill and cleaning house are highly automated. While currently Chilliwack is staffed by two millers overnight, one for each unit, O’Brien said that over time the goal is for a single miller to run both.
Rogers also has successfully weathered a major leadership transition over the past year. As president, Girdner succeeded Vic Bell, who had served as president of Rogers Foods for 18 years. When Chilliwack began operations, Rogers’ had as seasoned a team of managers as any milling company in North America. Since then, in addition to Bell, Lew Rossner, and Rudy Bergen, other longtime Rogers executives, retired, and the company’s chief financial officer Brent Henderson died suddenly following a brief illness.
Michele Tepper has been named controller of the Chilliwack business, and Brad Duggan is the mill’s director of sales. Duggan has been with Rogers for seven years.
Another change in recent years has been interaction with Miller Milling Co., Bloomington, Minnesota, U.S. Nisshin acquired Miller Milling in 2012, and Rogers and Miller continue to operate independently. Still, while there was little formal interaction between Rogers and Miller Milling initially, cooperation has expanded steadily through the years, O’Brien said.
“First, it was between the leadership, and then it expanded to sales and then grain,” he said. “With Jeff there (Jeff Thomas, CEO of Miller Milling, formerly vice-president of operations), we are working to cooperate more on the production side.”
The wide range of flours milled at Chilliwack are in addition to the specialty flours milled at the original Rogers flour mill. While the new B unit will mill whole wheat, most of Rogers’ whole wheat production is milled at Armstrong. O’Brien said. He said that overall demand for whole wheat in Canada has flattened, much like the United States.