Digital Re-print - November | December 2009

Feature title: New mills? - Location, transport and other considerations

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New mills?
Location, transport and other considerations
The costs of operating a flour distribution system efficiently may well determine where to build and what
capacity to construct when it comes to replacing a flour mill. Feature writer Jonathan Bradshaw explores
the options and responsibilities company board members have in considering the location of a new mill.
by Jonathan Bradshaw
I
t is not that often that we
see complete new mills being
built in the UK these days,
although there are several under
construction at the moment,
which is rather unusual.
Our European counterparts, however,
are much more active and are constantly
indulging in new construction work.
“I can well see a time
coming where we see the
Chinese manufacturers
making the vast majority
of flour milling equipment
that is sold in Europe
and the European
engineers specializing
in pure design work”
And perhaps there are good reasons
for considering new building work at the
moment, for the offers that are forthcoming
14 | november-december 2009
from engineers, both civil and mechanical,
are extremely attractive. Certainly, it is not
a time to be putting one’s head in the sand
and then simply complaining about the lack
of competitiveness in the industry.
Cost-effective footprint
New technology has led to the intro-
duction of modular sifters and two high
rollermills that give for a much more cost-
effective footprint than
we have ever been able
to consider before and it
is relatively easy to intro-
duce additional capacity
into quite a small space.
With fossil fuel costs
still relatively high, the
cost of moving wheat
into the mill, distributing
flour out and minimising
the cost of wheatfeed
and bran disposal, there
are significant incentives
available to relocate,
although in many cases in
Europe local trade links
have developed between
miller and baker over the
years that optimise trans-
port routes and make
the existing location of
many mills still the ideal
choice.
However, there are
some fairly aggressive
bakers out there who are constantly exam-
ining their trade routes and costs of distribu-
tion and we see many new bakeries being
New Mills Feature
built throughout Europe almost constantly.
The concept in England of utilising central
storage for grain is not new, although it does
seem to have taken on a new lease of life
in certain quarters and the costs of moving
grain from grain store to mill have been kept
to a minimum in many cases.
I welcome this incentive of central grain
storage since there now arises the oppor-
tunity to provide the miller with mycotoxin-
free (or greatly reduced) wheat of a constant
protein and hagberg level, all year round.
It also allows for a greater degree of plan-
ning in of raw material supply and reduces
the involvement at the mill for wheat clean-
ing equipment since a great deal of cleaning
can be done before grain is stored at harvest
time after drying.
Replacing capital equipment
There is a great deal to be said for replac-
ing capital equipment on a regular basis
irrespective of what industry we operate in,
but there is a distinct benefit for replacing
flour milling equipment regularly as this helps
maintain milling performance and yields and
reduces power consumption.
Having said this, it does not appear to
have escaped the attention of some mill-
ers that current offerings of rollermills, in
particular onto the European milling market,
are over engineered in terms of life span and
several millers have bought rollermills from
China and the Far East in order to keep costs
down to a minimum.
Neither has it escaped the wit of sev-
eral European milling engineers that they can
have their designs manufactured in China
for a significant cost discount in comparison
Grain &feed millinG technoloGy
Feature New Mills
to their own manufacture in England or
mainland Europe.
The cost of developing new machinery
is high and once a model is established,
engineers naturally seek to maximise sales
from that design before spending time and
effort in designing, manufacturing, testing and
finally tooling up a plant to manufacture an
individual machine.
I can well see a time coming where we
see the Chinese manufacturers making the
vast majority of flour milling equipment that
is sold in Europe and the European engineers
specializing in pure design work. This is hap-
pening to some extent on smaller machines
although rollermills and sifters are still the
preserve of their original designers and are
more or less made ‘in house’ albeit that the
So why would anyone want to build a Power consumption is monitored and adjusted
in house facility may well be based in China,
new mill in today’s economic environment accordingly when plant is running and with the
but is completely controlled by the designers
when finances are tight and returns uncer- introduction of such items as self balancing
and principal milling engineer.
tain, as the press would have us all believe. pneumatic control valves (Buhler) the last great
Some ancillary items, pneumatic systems,
The simple answer is that there is more mar- power consumption are is being addressed.
gravity spouting, blowlines, etc are made in the
gin to be made than hitherto and investment
country where they will be fitted as this mini-
mises transport costs to the final mill location.
to either improve performance or reduce Logistics
expense is easily possible. But perhaps the biggest saving to be
This too is the case for items such as Performance enhancement can be made and the main reason why mills are
conveyors and elevators in some cases achieved by improved yield and there is being built are the logistical costs of moving
although the major engineers prefer their greater use of debranning and peeling tech- goods around the country.
own manufacture to bought in equipment nology than
and I support their view, often because their we have seen
own equipment is far superior in design, before to add
power consumption and durability. It often credence to
suits regulations better from a dust suppres- that belief.
sion point of view. With the
There have been many cases throughout use of colour
the world where colour sorters have found sorters and
their way into the screenrooms of mills. the range of
Indeed, if we were building new mills it cleaning equip-
is hard to imagine a screenroom without ment currently
a colour sorter being used. The effect
this equipment has on building size, overall
available then
screening
machinery content and general layout is
quite impressive. In one small organic plant
removal
much more
is
I came across recently the only piece of
equipment in the screenroom was simply a
selective and
Screenroom
colour sorter, nothing else. Granted, capacity
was low at around one tonne per hour but,
losses are no
longer as pro-
nevertheless, it shows what can be done and
perhaps more importantly where we are
hibitive as they
were even
going in terms of mill machinery inclusion. a few years
back.
Short-term economics When
For many years in Europe we have
bought mills with a view to running them
it comes to
cost reduction
for many years, even decades and we have
evaluated machinery on its expected service-
we really see
technology
able life. There is now becoming a greater
awareness of short-term economics and
come to the
fore with fully
with true life costings being adopted more automated
and more in the accounts department when mills operating
evaluating capital projects we are seeing mills without any
being built very much ‘to a price’ and there is staff, other
a greater range of engineers labels to be seen than perhaps
around the countries of Europe. a day miller.
Grain &feed millinG technoloGy PREVIOUS PAGE NEXT PAGE november-december 2009 | 15

Long gone are the days when drivers sim-
ply appeared each day and delivered goods
into a certain area despite whatever quantity
was wanted overall by the bakers.
Now we monitor consumption by each
of our customers and we perhaps know
more about their operations than they
do themselves, certainly when it comes
to inventory control we know more than
anyone what rate of consumption take place
through the week.
We can deliver flour at the drop of a
hat but we are better organised than that
and we know well in advance when a baker
“How do we decide when the time
is right to rebuild or relocate?
It should be a subject up for
discussion at every board meeting
and something which we should be
constantly discussing as it keeps
us aware of what our aims are
and what our objectives should
be. We are not here to be kind
and gentle, traditional millers
we are in business to make a
profit. Let us not forget that”
will need replacement deliveries. With large
plant bakeries we have a steady stream of
tankers to-ing and fro-ing between mill and
bakery, and it is this which influences where
we locate our mills. The cost per tonne for
delivery has now reached a point where the
capital costs of building or relocating fall far
short of the ever-multiplying costs of fuel
that it takes to deliver flour.
With the use of vehicle tracking to opti-
mise routing of vehicles and all the various
other sophisticated aids that both driver
and transport manager have available to
them there is no reason why we should not
optimise the delivery procedure to the same
high level of efficiency as we have done with
the milling process.
16 | november-december 2009
There comes a time when limits are
reached however and the only efficiency
left to be made is by moving either the mill
nearer to the raw material or nearer to the
final destination for the flour.
In-group mill situations where multiple
facilities are operated in any one country I
am told that mills should be placed at 108
miles apart to maximise efficiency.
Precisely why 108 and not 100 I am not
sure, probably because the mathematics at
the fuel rate on the day worked out to that
figure.
However, the point being is that there
is a given consumption
of flour per capita and
in order to satisfy that
consumption then bak-
eries have been built to
optimise delivery costs
to the relevant super-
market networks so
that again, distribution
costs are minimised.
In many countries
throughout Europe
however the consump-
tion of flour is greatest
as very refined baked
goods rather than the
plant bakery type sand-
wich bread we produce
in the UK. This leads to
the general number of
bakeries being greater
yet the output smaller
at higher margins.
In the Far East we
see most flour being
sold in small cotton
bags although there is
sufficient consumption
within a small distance
from the mill due to
the high population
density as to make it
possible to sustain large
mill outputs with mills very close to each
other.
In the UK we consume a large proportion
of our flour through fast food outlets, either
used directly at the sale point or in large quanti-
ties of items such as burger buns. This concen-
trates the main consumption to city centres
and fast food outlets dominate the retail trade.
Obviously, much of the trade in flour is
tied trade and as well as the plant bakery
trade there is a bespoke element of flour
consumption which is used in specialist plant
facilities where an array of ready meals, pies,
rolls and similar items are produced.
This is the trade, which was at one time
‘free trade’ which we all competed for, and
which now has been taken in hand by the
PREVIOUS PAGE NEXT PAGE
New Mills Feature
major millers and is now fully integrated.
Obviously, having the mill close to such
high usage factories and plant facilities influ-
ences the efficiencies of the overall integrated
operation, hence we see these organisations
rebuilding more regularly, purely from a
logistical viewpoint.
Smaller mills in Europe
Our size of mill in Europe is generally
smaller than the rest of the world, especially
where grain shipments are made by sea and
are generally of a larger size than we nor-
mally handle in the UK.
Storage of grain in Europe is kept to the
minimum, often down to just a few days,
whereas with mills in the Far East where US
and Australian wheat is the preferred choice,
we see shipments of at least one month
being adopted and storage obviously cor-
responds to allow for effective movements
of vessels.
In Africa we see a mixture of shipments
and we see a variety of mill sizes.
Those mills with port facilities will utilise
them to the maximum and we see some
vary large installations on the North East
and the West Coasts. In the hinterland mills
try to use as much locally grown wheat as
possible although the vagaries of supply
because of drought, availability of central,
organised, grain storage make this a difficult
pursuit.
The interference in market logistics by
governments demonstrates a woeful tale and
there is a series of disasters, which we should
have learnt from by now.
Suffice to say that Africa could be self
sufficient in flour and almost independent in
animal feed production if it were organised,
but there are many redundant and dilapi-
dated mills ripe for being rebuilt throughout
Africa. Sad to say they will probably remain
that way for many years.
Summary
However, to summarise the main points
of this article, what influences the location of
new mills today? Customer location, costs
of labour, power, raw materials, labour,
maintenance costs.
Is it the costs of operating a flour distribu-
tion system efficiently and well enough to
compete with other millers, yet still leaving
a margin? And how do we decide when the
time is right to rebuild or relocate?
It should be a subject up for discussion at
every board meeting and something which
we should be constantly discussing as it
keeps us aware of what our aims are and
what our objectives should be. We are not
here to be kind and gentle, traditional millers
we are in business to make a profit. Let us
not forget that.
Grain &feed millinG technoloGy
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