Interflour expands Vietnamese milling

11 Sep, 2015 02:00 AM
Interflour has added to its Vietnam flour mill portfolio, with the purchase of an existing mill at Da Nang on the central coast adding to its site at Cai Mep (pictured).
Interflour has added to its Vietnam flour mill portfolio, with the purchase of an existing mill at Da Nang on the central coast adding to its site at Cai Mep (pictured).

WA Wheat growers will be the primary suppliers to a Vietnam-based flour mill purchased by CBH part-owned company Interflour.

The acquisition of a mill at Da Nang, on Vietnam's central coast, was announced last week as the company moves to supply more product into the Asian market which has a growing demand for flour.

CBH owns 50 per cent of Interflour, which now owns nine flour mills across Vietnam, Indonesia, Malaysia and Turkey.

The latest purchase was made without any additional equity from CBH.

Interflour chief executive officer Greg Harvey said the Da Nang mill would assist Interflour to better serve a market it already supplied with flour deliveries from its existing Cai Mep facility in southern Vietnam.

"We're pretty well close to full capacity at Cai Mep, so we had to consider whether we would expand there or elsewhere into a market that we service from Cai Mep," Mr Harvey said.

"We found this opportunity with an existing flour mill and an owner that was looking to sell so we decided to add capacity to our business by buying that mill rather than building further at Cai Mep.

"We're there to make the most of the opportunity.

"The Vietnamese market in general is on a growth pattern, per capita consumption is increasing wheat flour year-by-year in line with its economic growth and also we've got the population growth to support it."

The mill, which was formerly owned by food producing company Foodinco, was established in 1999 and has a production capacity of 220 tonnes a day.

The purchase of this mill supports Interflour's growth strategy to reach a 10,000mt/day processing capacity by 2018.

Mr Harvey said the Da Nang mill was relatively small by Interflour's standards when considering the Cai Mep site can produce 1000 tonnes per day, but there was room for expansion as demand grew.

"When we buy mills we're very disciplined and we probably knock back more opportunities than we take," he said.

"One of the criteria we've got is having good land that enables us to expand on those sites in the future and this site fits that bill.

"We've got to keep growing and we have plans to keep growing over the next three to five years".

Wheat for Da Nang will be delivered to Vietnam via the Cai Mep site where Interflour owns port access which can receive up to Panamax-sized vessels and be shipped up the coast on barges.

Mr Harvey said bulk shipments with one delivery site would save money and time.

He said as Interflour's needs for wheat grew, the focus on Australian and, primarily WA wheat, would continue.

"We will continue to keep Aussie wheat at existing market share at 70pc plus and it'll be WA wheat that is primarily used at Da Nang," he said.

Interflour is also developing a malt barley facility in Vietnam, with work having started on the Cai Mep-based project earlier this year.

More than 700 concrete piles have been put into the ground and raw barley silos have been erected for the factory that will produce an initial 110,000t of malt annually, with scope to increase to 220,000t within two years.

Ground work for the factory site is underway and Mr Harvey said he expected to have it in full operation by 2017.

No malt is produced locally and between 400,000 and 450,000t of malt is imported mainly from Belgium and France each year.

Mr Harvey said market feedback as the new venture neared operation had been very "pleasing".

"We're very pleased with the market response and we're already in a lot of detailed discussions with brewing companies about how we can supply their needs," he said.

Date: Newest first | Oldest first


11/09/2015 7:29:56 AM, on Farm Weekly

CBH can never be found at the top of the cash wheat bids. They prey on the poolers. So are the profits going to the flour mills or the pools? When do we get lower storage and handling costs and competitive cash bids from CBH? That's all the majority of farmers care about.
Gerry Atric
12/09/2015 1:55:50 PM, on Farm Weekly

For a farmer so excited about deregulation, it is amusing to see you complain about 1 companies prices. You have over 10 buyers to choose from, sell to the highest bid.


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