Focused in Southwest

by Josh Sosland
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When ConAgra Mills acquired a new but closed flour mill at Saginaw, Texas, the company saw an opportunity to improve the geographic position of its milling capacity in the Southwest. In deciding to add a second milling unit there, the company affirmed the wisdom of the decision and made a powerful commitment to serve the robust Texas market.

Replacing its aging mill in Blackwell, Okla., with Saginaw represents an upgrade in product capabilities, milling technology, sanitation, strategic location, wheat procurement, customer service and operational efficiency. In short, the company believes the Saginaw mill, in combination with its mill in Sherman, Texas, places the company in an ideal position to serve and grow in one of the largest and most promising regions in the United States.

"Saginaw gave us the opportunity to replace capacity that was outdated and out of position with newer capacity closer to our customers in a dynamic growth market," said Don L. Brown, the company’s vice-president of sales.

Within the ConAgra Mills constellation of 23 U.S. flour mills, the Saginaw mill gives the company a more compact footprint in the Southwest. Soon after it began operating the Saginaw mill, formerly owned by Country Home Milling L.L.C., the company closed Blackwell, just south of the Kansas state line and 270 miles away from Sherman. Saginaw is 90 miles from Sherman.

"When all is said and done, Saginaw for ConAgra Mills was not so much about adding capacity as it was for relocating and meeting the needs of the marketplace," said Randy Garvert, manager of the Saginaw and Sherman mills.

While located in the heart of wheat growing territory, the Texas mills are essentially destination mills, predominantly serving customers in Texas, Arkansas, Louisiana and, to a lesser degree, Oklahoma. A large proportion of the flour milled at Saginaw goes to customers in the Dallas-Fort Worth metroplex, of which Saginaw is a part.

The fourth largest metropolitan area in the United States, the area also encompasses Arlington, Plano and Denton, a 12-county area in all. Population in 2008 was 6.3 million, up from 5.2 million in 2000.

"What has happened in this metroplex over the last 25 years has been phenomenal," Mr. Garvert said. "Even over the past couple of years it has been impressive. Not that there hasn’t been economic pain during the downturn, but it has not been as bad as elsewhere. It is a pretty resilient marketplace."

Highly flexible milling unit addition

In a project completed just over a year ago, ConAgra Mills added equipment for a second milling unit at Saginaw. Rather than mirroring the first unit that has 6,000 cwts of daily milling capacity, the B mill at Saginaw has 8,000 cwts of capacity. Additionally, the new unit is a swing mill able to produce like amounts of either hard wheat flour or soft wheat flour and also is capable of milling whole wheat flour.

Roughly half of the production at the mill is sacked, with the balance shipped bulk.

Flour milled at Saginaw is used for a wide range of end products, including bread, tortillas, snacks, biscuits, rolls, buns, pizza dough, breading, batters, cookies, crackers and institutional products such as gravies and spices.

"Saginaw is a very diverse facility with the ability to mill so many different kinds of wheat and blend them to meet the needs of our customers," Mr. Brown said. "We didn’t have that flexibility at Blackwell."

The Saginaw location, in the heart of the Dallas-Fort Worth area, gives the mill additional advantages, Mr. Garvert said.

"We can be very responsive to customer needs, and deliver flour very quickly in the metropolitan area," he said. "Customers can call, and we can have flour loaded in a trailer within an hour. That means we can deliver flour in 1½ to 2½ hours, depending on the location in the metropolitan area, from the time the customer calls."

The myriad varieties of flour produced there is important to Mr. Brown, the ConAgra Mills executive responsible for selling what is milled at Saginaw.

"It serves a very diverse market, which is why the plant was designed the way it was," he said. "I wouldn’t be so comfortable if it were a 14,000-cwt bread flour plant. With the capabilities it has, just about any product the customer needs can be supplied. And it gives us a lot of flexibility in responding to year-to-year crop changes."

As a complement to this setup, ConAgra Mills has simplified the Sherman mill, giving it a greater focus on larger customers with a smaller number of flour mixes produced and no packaging line at all, Mr. Garvert said. He said the Sherman mill has not been relegated to second tier status by the acquisition of and investment in Saginaw.

"We’ve made and continue to make significant investments there," Mr. Garvert said. "Sherman is the mill that allowed us to build our base of business in Texas. It very much remains the base upon which ConAgra Mills has been able to supply customers from Texas."

Elaborating on these investments, Mr. Brown said heightening food safety standards necessitate such investments at Sherman, at all ConAgra Mills facilities and across the entire flour milling industry.

"We have a commitment to be sure all of our facilities are able to go into the future with our customers in terms of quality and food safety," he said.

From a large picture perspective, this commitment has steadily changed the face of ConAgra Mills, he said.

"If you go back only five years, we were operating 28 facilities," Mr. Brown said. "Today the figure is 23, but capacity is the same. We are investing in modernizing facilities in key markets. The trend in the industry toward fewer, larger mills is one we believe will continue."

Even though they are quite close to one another, the Sherman and Saginaw mills are very different in where they source wheat. While Sherman is deeper into Texas wheat growing territory than Saginaw, the latter mill actually is better positioned to take advantage of Texas wheat because its rail access allows it to draw from a wider network of sources within the state.

"Quality of the Texas crop is very good this year, but it is a small crop, and we will be bringing more wheat in from outside the state," said Jeffrey D. Thomas, head miller.

Wheat to the mill is supplied by Gavilon L.L.C., the grain merchandising and trading business spun off from ConAgra Foods in June 2008. Gavilon now owns the elevator next to the Saginaw mill. The elevator, which receives wheat on the Burlington Northern Santa Fe and the Union Pacific railroads, has 15,353,000 bus of storage capacity, making it one of the largest terminal elevators in the United States. Still a major rail center, the area just around the Saginaw mill has one of the largest concentrations of terminal elevator grain storage capacity in the nation, giving ConAgra Mills good access to wheat from a vast expanse of origins.

"We have the ability to unload shuttle trains (100 cars), and you can count on one hand the number of U.S. mills with that capacity," Mr. Brown said. "The fact that the elevator is so large allows us to bin for specific qualities very effectively."

Giving a new mill a second chance

Mr. Brown described Mr. Garvert as one of ConAgra Mills’ veteran mill managers. Indeed, Mr. Garvert, a graduate of Kansas State University, has had assignments at an astonishing number of ConAgra Mills facilities since joining the company in 1981 — Sherman, Texas; Martins Creek, Pa.; Omaha; York, Red Lion and Highspire, Pa.; Tampa, Fla.; Decatur, Ala; and St. Paul, New Prague, Wabasha and Hastings, Minn.

Many mills at which Mr. Garvert was assigned have been closed as part of mill consolidation during parts of the 1980s and 1990s. For instance, he was working in Duluth for the winding down of a large durum mill there. He also was involved in the shut down of mills in St. Paul, Fergus Falls and Wabasha, Minn.

For all that experience, Mr. Garvert describes his experience at Saginaw as unique. Mr. Garvert returned to Texas six years ago as ConAgra Mills was acquiring the assets of Country Home Milling, which had been tied up in bankruptcy court. ConAgra Mills had bid against another leading milling company for the assets.

The mill had been built in 1999 by three organizations that jointly funded the business — Farmland Industries, Inc.; a regional cooperative in Oklahoma and Bay State Milling Co.

The mill had run a little longer than a year and then went into receivership. So when ConAgra Mills gained control of the facility three years later, it essentially acquired a brand new flour mill.

Still, the reality was a little more complicated than the image of a gleaming new mill. While dozens of mills have been closed in recent years, few have been shut down in the way developments unfolded at Saginaw, because of the bankruptcy.

"It was closed abruptly by the creditors," Mr. Garvert said. "The operators were not given the opportunity to ‘put it to bed’ the way a miller would like."

As a result, ConAgra Mills, in resuming operations more than two years later, faced a number of time consuming, labor intensive challenges in dealing with sanitation problems at the Saginaw mill.

Mr. Garvert and the staff spent six months cleaning the facility, readying it for operation.

"We dismantled every roll stand," Mr. Thomas said. "Every bearing was taken apart and repacked. Every airhose on the equipment was replaced because we were worried about deterioration since they had not been used for so long. All of the flour bins were washed and treated and the bottoms were replaced."

The difficulties associated with the reopening helped set the stage for what Mr. Garvert believes may be "one of the most unique aspects" of the Saginaw mill, which is the crew itself. While proud of his colleagues at the many ConAgra Mills facilities he has managed, he said a number of factors set the Saginaw group apart.

"We simply have a magnificent team here," Mr. Garvert said. "We have a couple of people who returned after working at the original Country Home mill. We brought over a maintenance specialist from Sherman. But everyone else was green, and we all started here essentially at the same time. We really gelled into a unique team."

The experience of preparing the mill to reopen helped create a cohesive, self-directed, engaged workforce at Saginaw, Mr. Garvert said. Hierarchy of rank is deemphasized.

An example of how this team approach is maintained is the hiring policy. Mill workers are hired on a probationary basis following a reasonably standard interview process, Mr. Garvert said.

"Candidates aren’t hired on a permanent basis until they’ve worked a while and the entire team decides whether they will be an effective part of the team," he said. "So it doesn’t do a new hire any good to suck up to Randy Garvert or the other supervisors.

"Our operating approach here is that once you have the needed tools and training, each of us is expected to do whatever needs to be done. We never say ‘It’s not my job.’"

Maximizing capacity potential

When the Saginaw mill was built in 1999, Country Home constructed the facility with the idea that a second milling unit would be added. So ConAgra Mills acquired a mill with much of the infrastructure in place for a second unit — open floor space, slip form flour bins (without the bin bottoms) and temper bins.

Structurally, all that was added as part of the expansion project was a new feed bin built by Younglove Construction, L.L.C., Sioux City, Iowa.

"We were very fortunate the infrastructure was in place," Mr. Garvert said. "In today’s flour markets, with today’s flour economics, the returns on investment would not allow us to add the capacity on a greenfield site."

Mr. Garvert said squeezing 8,000 cwts of daily milling capacity into a space originally conceived as suited for a 6,000-cwt mill was the greatest challenge in executing the project. Buhler Inc. was engaged as the principal milling equipment supplier.

"That was the trick," he said. "It was Buhler ingenuity, beginning with the double-high roll stands that made it possible to get 8,000 cwts of capacity."

Continuing to run the A mill while the expansion was under way also created challenges, Mr. Thomas said. Still, the installation was completed in a fairly short period of time, beginning in December 2007 with the mill fully operational in June 2008.

In addition to the double-high roll stands, other advanced technological features in the mill include Buhler Sirius sifters.

"Sanitation is more important today than ever, and the mill has no wood in it whatsoever," Mr. Thomas said. "Within the sifters, the sieves are made from preformed plastic."

Mr. Thomas was ConAgra Mills’ day-to-day point man for the expansion project with corporate support from Dean Hoerning, director of engineering; and Ted Korolchuk, director of technical milling; and overall oversight from Brad Allen, vice-president of manufacturing.

In addition to Plymouth, Minn.-based Buhler Inc., other companies involved in the expansion included Blower Engineering, Inc., Lewiston, N.Y., for blowers; WAM Inc., Fort Worth, for screw conveyors; Tramco, Inc., Wichita, Kas., for drag conveyors; Interstates Companies, Sioux Center, Iowa, for electrical (including Allen-Bradley programmable controllers); SCA Inc., Independence, Kas., for equipment installation; and Younglove, the site general contractor.

The new milling unit has the capacity to run "lights out" but is not being operated that way, Mr. Thomas said.

Still, the mill’s staffing is lean with an hourly workforce totaling 23.

The Buhler roll stands allow easier roll change, emblematic of a focus on sanitation in the new project. Concern about sanitation naturally is heightened anywhere in the southern portion of the United States because of warmer weather, but the issue has taken on even greater importance in milling because of the changing environment for fumigation. The Saginaw mill has been methyl bromide free for the past five years, utilizing instead a monthly fogging system.

"We believe long term Texas is a critical market to be well positioned in," Mr. Brown said. "We want to do it with modern assets. We are investing in the future of the marketplace."

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