CHATTANOOGA, TENN. — Grain Craft is closing its Salt Lake City flour mill. Peter Frederick, president of Grain Craft, attributed the decision to “redundant capacity” in the western United States.
The Salt Lake City mill has 8,000 cwts of daily milling capacity and was acquired by Grain Craft in 2014 as part of the company’s acquisition of Cereal Food Processors, Inc.
|Peter Frederick, president of Grain Craft|
“After finalizing the integration of Grain Craft, we began a review of our asset base and determined that there was redundant capacity in the system,” Mr. Frederick said. “This led to the difficult decision to close our mill in Salt Lake City. We have executed that closure and shifted the servicing of our customers to other mills.”
Principal among these other mills is Grain Craft’s Ogden, Utah, facility, about 35 miles north of Salt Lake City. With 16,000 cwts of daily capacity, 1.3 million bus of grain storage, packaging lines and rail service by the Union Pacific Railroad, the Ogden mill offers Grain Craft and its customers greater flexibility than was the case for Salt Lake City, Mr. Frederick said.
“We have made significant capital investments in our company’s larger Ogden facility,” he said. “It is one of our flagship mills.”
Mr. Frederick said the decision to close Salt Lake City was a reflection of the state of the milling industry in 2017 rather than unique challenges by Grain Craft. He noted that on an industrywide basis, milling capacity has risen several percentage points since 2013 while capacity utilization has dipped to new recent lows.
“Our share of the flour market in the West, where we are the market leader, has been and remains strong,” he said. “The recent trend in milling has been to refurbish existing capacity in high demand markets or build new capacity tied directly to customers, both of which makes sense. But as this has occurred and with consumption trends flat to lower, absorbing capacity from older assets that are inefficient and out of line becomes more difficult. This is what we determined for Salt Lake City.”
The mill is the second Grain Craft has shuttered in recent years. In 2014, the company halted operations at Hawaiian Flour Mill in Honolulu with the expiration of the company’s lease from the state of Hawaii.Following the closing of the Salt Lake City mill, Grain Craft will remain the third largest flour milling company in the United States with daily capacity of 161,600 cwts, based on figures submitted for the 2018 Grain & Milling Annual published by Sosland Publishing Co. The company’s other milling locations west of the Rockies besides Ogden include Los Angeles; Blackfoot, Idaho; Billings and Great Falls, Montana; and Pendleton and Portland, Ore.