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Miller Milling President Kazuyoshi WATANABE: “The selected mills are worth considering”

10 July 20146 min reading
“As we have been actively expanding our business by taking advantage of Nisshin’s key strength of R&D technology, Miller Milling was operating at full capacity before adding 4 mills. In January 2014, it was announced that selected mills will be divested from consolidation of North America flour milling businesses of Cargill, ConAgra and CHS due to antitrust issues. We made the decision to participate in the process based on the judgment that the Transaction is worth considering.” As the U.S.-based subsidiary of Nisshin that is one of the world’s leading milling groups, Miller Milling incorporated 4 large flour mills in U.S. a while ago. Reaching 6 flour mills in U.S. with the newly purchased mills, Miller Milling now is the fourth largest milling operation of the country market. Interviewing on the new purchases and Miller Milling’s new position in U.S. milling industry, Miller Milling President Kazuyoshi WATANABE draws attention to the potential of the purchased mills in their locations: “In terms of location, each mill is located in the close vicinity to the destination areas. Given that population in California and Texas has been growing more than that of the U.S. average, we see both markets as promising”. Stating that as Miller Milling they apply some precautions in order to maintain the existing customer base; WATANABE says the following: “We will promote of our tailor made proposal services by taking advantage of development and technological edges to differentiate ourselves in winning customer satisfaction”. President Kazuyoshi WATANABE tells the details about Miller Milling himself. Miller Milling Company was one of the leading mills of U.S. and as we know, it was acquired by Nisshin Seifun Group in 2012. Firstly, could you please give us information on the position and activities of Miller Milling before it was acquired by Nisshin Seifun? Miller Milling was founded in Minneapolis in 1985. We got our start providing durum semolina to large customers through regional destination mills. In 1988, we added bread and tortilla flours to our product line and we provide flour regional and national brands across the country. With the incorporation of our company by Nisshin; we started to operate two more mills. One of these mills is the mill in Fresno, California with a daily 9,500 cwts milling capacity. Tortilla and all-purpose flour, whole-wheat tortilla and all-purpose flour, semolina and durum flours, whole wheat durum products are produced in this mill. Another one is the mill in Winchester, Virginia with a daily 26,500 cwts milling capacity. Semolina and durum flour, hard red winter wheat flour, hard red spring wheat flour (high and medium gluten), hard wheat blended flour, whole wheat flour, whole wheat durum products are produced in this mill. Well, how was the purchase process of Miller Milling by Nisshin Seifun developed? Was there any change at Miller Milling after this purchase and how it was experienced? What were the advantages of this purchase for Miller Milling? Since Nisshin’s acquisition of Miller Milling in 2012, Nisshin has been working on smooth transition and value creation. As part of these efforts, the capacity expansion work was completed in February last year and the daily milling capacity was increased by 30%. As we have been actively expanding our business by taking advantage of Nisshin’s key strength of R&D technology, Miller Milling was operating at full capacity before adding 4 mills. You have become the fourth largest milling business of U.S. by incorporating 4 mills that were put on sale in U.S. a while ago. Could you share the development and finalization process of this significantly important success with us? As we have been actively expanding our business by taking advantage of Nisshin’s key strength of R&D technology, Miller Milling was operating at full capacity before adding 4 mills. In January 2014, it was announced that selected mills will be divested from consolidation of North America flour milling businesses of Cargill, ConAgra and CHS due to antitrust issues. We made the decision to participate in the process based on the judgment that the Transaction is worth considering. Could you give information on the facilities you acquired? What can you say about the locations, process capacity of the facilities and their roles on the market? One of the newly purchased mills is Los Angeles plant of Horizon Milling in California. Daily milling capacity of the plant is 12,600 cwts. Hard and soft flour is produced in here by processing hard red winter wheat, soft white wheat and dark northern spring wheat. Other three mills are the plants of ConAgra Mills in Oakland, California; New Prague, Minnesota and Saginaw, Texas. Daily milling capacity of the mill in Oakland is 14,000 cwts, daily capacity of the one in New Prague is 18,000 cwts and the daily milling capacity of the mill in Saginaw is 14,000 cwts. Bakery flour, whole wheat flour and wheat germ are produced in all of these three mills. In terms of location, each mill is located in the close vicinity to the destination areas. Given that population in California and Texas has been growing more than that of the U.S. average, we see both markets as promising. In light of product, the 4 mills have a wide variety of product lineup of whole wheat flour as represented by malt barley which is dealt only by a handful of millers even in the entire U.S. market. As Miller Milling, will you make any investment on the revisions of the newly acquired facilities? Yes, we are planning now but we do not prefer giving details. As the purchase has been completed, how the next process will be handled? What kind of a business model will be used both in the management and production processes of these facilities? What products or products groups will be produced by these facilities? Miller Milling is implementing measures to maintain the existing customer base. We will promote of our tailor made proposal services by taking advantage of development and technological edges to differentiate ourselves in winning customer satisfaction. We had additional technical sales personnel from Japan and hired additional local sales personnel. Now, you are the fourth largest company in U.S. Well, what is your position in the world market? Do you have any production centers, facilities or offices outside United States? Nisshin Flour Milling Inc. is the milling business of Nisshin Seifun Group working in a wide range of services and having offices and plants in many regions of the world. Based on our own research, Nisshin will be the sixth largest miller in the world by milling capacity. Regarding other facilities overseas besides U.S.; Nisshin currently has milling businesses in Canada, New Zealand and Thailand. What would you like to say about next goals of your company? I can say that while priority should be to focus on the integration of Miller Milling and the four mills in the short term, we do continue to pursue M&A opportunities in the U.S.
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