- By Lynda Kiernan-Stone, Global AgInvesting Media
CBH Subsidiary, Interflour, Expands Vietnamese Flour Milling
Interflour, which is 50% owned by CBH, announced last week the acquisition of a mill in Da Nang on Vietnam’s central coast. Wheat growers in Western Australia will be the main supplier to the mill, as Interflour aims to gain a larger share in Vietnam’s emerging market where demand for flour is steadily climbing in line with the country’s population growth and economic growth trends.
This acquisition, which was made without additional equity from CBH, adds to Interflour’s existing mill in Cai Mep in Southern Vietnam, and brings the total number of mills owned by Interflour across Vietnam, Malaysia, Indonesia and Turkey to nine.
"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," said Greg Harvey, Interflour chief executive. "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.”
The newly acquired mill, formerly owned by food company, Foodinco, is comparatively small compared to other Interfour sites, having a production capacity of 220 tons per day – but the plant will support Interflour’s target of reaching a production capacity of 10,000 tons per day by 2018.
Wheat deliveries for the Da Nang facility will arrive at Cai Mep, where Interflour owns port access that is able to handle Panamax-sized ships. From there the wheat will be transported via barge to Da Nang.
"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," said Mr. Harvey.
In addition to the milling expansion, Interflour began the development of a malt barley facility in Cai Mep earlier this year. Currently, there is no local malt production, and between 400,000 and 450,000 tons of malt in imported to the country from Belgium and France each year. Construction on the facility site has begun, and Interflour is engaged in talks with brewing companies about supplying their malt needs. The facility is expected to be operational by 2017.