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Ranking The World’S Biggest Flour Millers

For the first time, World Grain has ranked and profiled the world’s largest wheat milling groups. The picture is one of increasing consolidation but not yet on a global scale. Four of the top 10 companies have milling operations almost exclusively in China, including Wudeli, the largest by a wide margin. The greatest new capacity addition is happening mostly in China as well. The three U.S. companies making the list are limited to North America, with the exception of ADM’s U.K. subsidiary. Nisshin Seifun has the most even distribution of operations among countries but is wholly absent from major parts of the world. Europe’s largest milling group ranks just 10th globally and accounts for only 4% of the 70 million tonnes of wheat milled annually in the E.U.-27.

The capacity estimates and other information come from company websites, media reports and reliable industry sources, but World Grain cannot fully vouch for its accuracy.

1. Wudeli Flour Group

Headquarters: Daming, Hebei Province, China
Installed capacity: 45,000 tonnes per day


Wudeli Flour Group has more than doubled its production capacity in the last eight years and now ranks No. 1 in installed capacity.
Photo courtesy of Wudeli Flour Group

The world’s biggest wheat milling company is situated in the heart of the North China Plain, the major growing zone in the top wheat-producing and consuming country. Wudeli has 15 milling subsidiaries in six contiguous provinces of northern China. Projects are underway to build four greenfield mills of 3,000 to 5,500 tonnes per day capacity at new locations and to expand capacity at another six sites. All told, the company will add about 35,000 tonnes of new milling capacity to bring its total to 80,000 tonnes per day. Doubters need only to look at the company’s track record. In 2012, daily capacity was 20,000 tonnes, already the largest among Chinese milling companies, but within six years had doubled to 40,000 tonnes. Once the current expansion goal is realized, Wudeli’s domestic market share will climb to about 30%. Wudeli’s mammoth plants operate at about 90% capacity utilization compared to an average 40% utilization for second and third tier mills in China, so the pace of consolidation is bound to continue. The family-owned business only started milling wheat in 1989 and built its first 200-tonne-per-day mill in 1996.The company is managed by the two sons of the founder, Dan Hong, born in 1940, who still frequently reviews company financial reports.

2. Archer Daniels Midland Co.

Headquarters: Chicago, Illinois, U.S.
Installed capacity: 27,000 tonnes per day
Countries: United States, Canada, United, Kingdom, Caribbean


ADM Milling in 2018 expanded and modernized its flour mill located in Enid, Oklahoma, U.S.
Photo courtesy of ADM

By market share, Archer Daniels Midland (ADM) occupies the second or third position among milling companies in the United States, Canada and U.K., all mature markets where industry consolidation has largely run its course. In 2019 in Mendota, Illinois, U.S., ADM Milling opened the largest greenfield plant ever built in the United States with 30,000 cwts (1,800 tonnes) daily capacity. Seven mills in Canada process around 4,000 tonnes daily. Another seven in England and Scotland can grind 800,000 tonnes of wheat per year. ADM Milling operates wheat mills in four countries of the Caribbean basin. The largest is in Jamaica. ADM is the only wheat miller in Belize, Barbados and Grenada as well.ADM’s 25% ownership of publicly traded Wilmar International means a large indirect stake in wheat milling in China, which is not counted in the above total.

3. Ardent Mills LLC

Headquarters: Denver, Colorado, U.S.
Installed capacity: 26,000 tonnes per day
Countries: United States, Canada, Puerto Rico


Ardent Mills’ flour mill in Puerto Rico, which was damaged by a hurricane in 2017.
Photo courtesy of Ardent Mills

Ardent’s 31 mills in 21 states account for about half of the flour sold in the U.S. market. Additionally, the company owns three mills in Canada and one in Puerto Rico.The company was formed in May 2014 as a joint venture that merged the milling operations of Cargill, ConAgra and CHS. The companies hold respectively 44%, 44% and 8% equity shares in Ardent. Before approving the transaction, U.S. anti-trust authorities required the divestiture of a number of operations to limit the new company’s market share to 50%. Rationalization of its network continues with the closure of three milling plants in 2019 and another scheduled for the first quarter of 2020, reducing installed capacity by 1,000 tonnes per day. Ardent’s creation was the biggest step in Cargill’s global withdrawal from wheat milling. During the last decade, the process also included the divestiture of flour milling companies in Australia, Argentina and Venezuela, all countries where the world’s largest agribusiness firm was once the major player.

4. Wilmar International Limited

Headquarters: Singapore
Installed capacity: 22,000 tonnes per day
Countries: China, Indonesia, Myanmar

Wilmar is one of Asia’s largest agribusiness company with $44.5 billion in annual sales turnover in 2018 of which China accounted for 56%.Under the name Yihai Flour Company, it started building state-of-the-art wheat mills on greenfield sites in China over 12 years ago, around the time the Chinese government capped Wilmar’s market share in soybean crushing. Yihai Flour operates more than 20,000 tonnes of milling capacity at 18 locations in 12 provinces with a grinding capacity of 6 million tonnes of wheat per year. Compared to those of Wudeli Group, Yihai’s mills are smaller with a wider geographical distribution from Heilongjiang and Liaoning provinces in the northeast to Fujian and Guangdong provinces in the south. It is also present in inland provinces like Yunnan, Sichuan and Shanxi. Yihai’s mills are mostly situated near largest population centers in each province like Shenyang, Harbin and Kunming, as well as in Beijing and Shanghai. Industry sources report Yihai has projects underway for 19,000 tonnes of new capacity based on expansion at 11 existing locations and four greenfield sites. Wilmar operates two mills in Indonesia and has included a mill at its port complex in Myanmar.

5. PT Indofood Sukses Makmur,

Headquarters: Jakarta, Indonesia
Installed capacity: 20,600 tonnes per day


Indofood’s Bogasari Flour Mills operates the world’s largest mill with 11,650 tonnes of daily production capacity.
Photo courtesy of PT Bogasari

Indofood’s Bogasari Flour Mills division boasts the world’s single largest milling site Located in the Port of Jakarta, a number of the site’s 15 milling lines were expanded from 800 to 1,200 tonnes per day in the last two years to raise total daily capacity to 11,650 tonnes, equivalent to 3.5 million tonnes of wheat annually. Bogasari’s second mill in the port of Surabaya, at the eastern end of the densely populated island of Java, also ranks globally among the biggest at 6,150 tonnes per day. Expansion in Cibitung in West Java near Jakarta will raise capacity there to 2,600 tonnes. The country’s 270 million people are expected to continue eating more wheat-based products as incomes rise and diets diversify. Indofood takes 22% of Bogasari’s output, mainly for noodle production at dozens of factories distributed throughout the vast archipelago. After Egypt, Indonesia is the world’s No. 2 wheat importer at 11 million tonnes per year in 2019. Since deregulation of the industry in 1998, the number of milling companies has jumped from five to 28, resulting in a decline of Bogasari’s market share to around 50%.

6. Nisshin Seifun Group

Headquarters: Tokyo, Japan
Installed capacity: 20,000 tonnes per day
Countries: Japan, United States, Canada, Australia, New Zealand, Thailand, China

Founded in 1900 as Tatebayashi Flour Milling, Nisshin Seifun Group is Japan’s largest wheat miller and one of its largest food companies. Faced with a declining population and stagnant consumption in its home market, the company increasingly has looked overseas for growth. Its U.S. subsidiary Miller Milling, based in Minneapolis, Minnesota, operates six plants including three in California. Three of these locations were acquired from ConAgra and one from Cargill’s Horizon Milling during the formation of Ardent in 2014, enabling Nisshin to become the fourth largest in the U.S. wheat flour market at around 4,000 tonnes (88,000 cwts) daily capacity. The company recently announced the closure of its 816-tonne-per-day mill in New Prague, Minnesota, U.S. Its first overseas milling venture was Rogers Foods with two mills in British Columbia, Canada, that also partially serve the U.S. market. Its next overseas move was in Thailand, where it built and operates two plants. In early 2019, Nisshin acquired Australia’s market leader Allied Pinnacle Mills – originally a joint venture between GrainCorp and Cargill – from a private equity firm that had acquired it in 2017.The 11 millingsites in Australia combined with the two plants of Champion Flour Milling in New Zealand make Nisshin the largest milling company in Oceania.

7. COFCO Group

Headquarters: Beijing, China
Installed capacity: 13,900 tonnes
Countries: China

As a sprawling, state-owned, “national champion” food conglomerate with 409 billion yuan ($58 billion)in annual revenues, COFCO differs sharply from its flour industry rivals. Domestic wheat milling is just a small part of its total business mix. COFCO’s Hong Kong- listed China Agri Industries Holding Ltd. subsidiary reported 2019 first-half wheat products sales with a value of HK$6.2 billion (U.S.$1.46 billion), ranking it third behind the company’s oilseed crushing (HK$43 billion) and rice milling (HK$9.1 billion) segments. COFCO’s 16 milling sites are in 12 provinces and cities. Average mill size of below 900 tonnes results in part from COFCO’s early history of rescuing failing government mills. Six of its sites are less than 600 tonnes per day.In the last year, COFCO acquired a 1,200-tonne-per-day mill in Tianjin to strengthen its position in the Beijing- Tianjin metropolitan region. In contrast to the organic growth models practiced by Wilmar and Wudeli, COFCO formerly relied on acquisitions but has more recently switched to building large-scale greenfield plants. Sources report that the company has projects to add 7,000 tonnes of capacity at three new locations, including expansion of its footprint by 3,000 tonnes in Henan, the Middle Kingdom’s No. 1 wheat-growing province, where it already has 4,000 tonnes of capacity at four mills. Plants of 2,0000 tonnes per day are also planned for Inner Mongolia province and in Dongguan, Guangzhou province, China’s leading export manufacturing hub.

8. Jinshahe Noodle Group

Headquarters: Xingtai, Hebei Province, China
Installed capacity: 11,000 tonnes
Countries: China

Jinshahe was founded in 1996 with a 15-tonne-perday capacity mill. The private company has steadily expanded its wheat flour milling and pasta operations in parallel and at an accelerating rate. As of 2017, the company’s website claimed daily milling capacity at 11,000 tonnes and noodle capacity at 2,800 tonnes per day. The company operates two giant mills, with 6,000 and 4,000 tonnes daily capacity in the cities of Shahe and Nanhe, respectively. Both are in the south of Hebei, the No. 2 province for wheat production after Henan. The Nanhe plant is undergoing a 50% capacity increase to 6,000 tonnes. Investment already has been made in a 1,500-tonne-per-day wheat mill in Alashankou, Xinjiang, province, directly on the border with Kazakhstan. A regular supply of hard wheat and durum from the Central Asian steppes will enhance Jinshahe’s ability to produce western-style pasta products. Sourcing wheat by rail from thousands of kilometers away is a clear case of mutual benefit arising from China’s Belt and Road initiative. Insiders talk of company ambitions for a trio of 7,200-tonne-per-day mills in Anhui, Shaanxi and Henan provinces that would vault the noodle company to the No. 3 ranking globally.

9. Grain Craft

Headquarters: Chattanooga, Tennessee, U.S.
Installed capacity: 8,200 tonnes

Grain Craft resulted from the amalgamation of three leading independent U.S. milling companies: Cereal Food Processors, Milner Milling and Pendleton Flour Mills in 2014, the same year Ardent Mills was formed. The company operates 14 plants in eight states with coast-to-coast market coverage. At the time of the merger, Cereal Food Processors and the Milner/PFM combination were the nation’s fourth and seventh largest wheat millers.The new entity, now based at Milner’s former headquarters, ranks No. 3 in the hugely consolidated U.S. market. Rationalization of manufacturing, distribution, marketing and administration is a key priority.

10. GoodMills Group GmbH

Headquarters: Vienna, Austria
Installed capacity: 8,000 tonnes

The European Union’s largest milling group has a market share of just 4%. GoodMills Group consists of 25 mills held in seven country-based subsidiaries. Total annual milling capacity is 2.8 million tonnes, with the 1.2 million tonnes at the eight sites of GoodMills Germany GmbH accounting for over 40% of the total. Poland and Hungary, each with four mills, are the second and third ranking subsidiaries by capacity at 530,000 and 300,000 tonnes per year. Austria, where the company is headquartered, has three milling locations. Other countries in the group include Romania (two mills), Bulgaria (one mill) and Czech Republic (two mills).The formation of GoodMills Germany and its acquisition by the Austrian group in 2014 arose directly from harsh penalties for price-fixing imposed on a large number of Germany’s flour milling companies in a verdict first handed down by the competition authorities in 2011 after a long investigation. To pay the stiff fines for their cartelistic behavior, selling out was the only option for a number of the family-owned flour mills.

Special Mention

Companies deserving special mention include East Africa’s Bakhresa Group, Interflour Group in Southeast Asia, and Flour Mills of Nigeria. Their rapid growth could vault them into the top 10 in the near future. The state monopoly Saudi Grains Organization would have placed No. 7 had it not divided its 13 large milling sites among four semi-autonomous companies slated eventually for privatization.

WUDELI makes good on promise

Chinese company has doubled milling capacity since 2012, with plans for similar growth in the coming years.

How did a small family-owned enterprise in an out-of-the-way place in rural China become in less than 30 years the world’s largest wheat miller? World Grain recently visited the headquarters of Wudeli Flour Group to seek the answer.

When our magazine last profiled the company in late 2012 it was already China’s No.1 flour producer with 20,000 tonnes of daily wheat grinding capacity and a 7% domestic market share. Mill expansions and new facilities under construction at that time targeted a 100% increase in output.

Wudeli’s earliest 200-tonne-per-day mill symbolizes the humble beginnings of the company in Daming in the 1990s. Photos by David McKee.

Six years later, chairman Dan Zhimin said his company is now nearly fully utilizing 42,000 tonnes of daily capacity at 14 locations in six provinces of northern China. Wudeli Group’s national market share has reached 15%, he said. Furthermore, the company is building five new greenfield plants and expanding six existing locations to double daily capacity yet again to over 80,000 tonnes.

Growth of such magnitude by a single company is, of course, unprecedented in the annals of milling history, just as the scale and rapidity of China’s economic transformation has surpassed anything that came before.

Remarkably, Wudeli’s expansion has been entirely organic – without the acquisition of existing mills or milling companies – in line with a single-minded strategy to locate ever larger and more efficient plants in key wheat production zones.

The five new locations make up half of the current expansion program. They consist of one factory of 5,500 tonnes per day; three of 4,000 tonnes; and one of 3,000 tonnes in Handan, a large city and regional administrative center for Daming, which is one hour by road to the southeast.

Qingdao is the site of Wudeli’s third milling complex in Shandong province, and the first factory to be located in a port city and outside the main wheat production zone. It will make use of imported wheat for much of its output.

Another 24,000 tonnes of new capacity is planned at existing locations, though the project sizes are subject to change. In Dongming, Shangdong Province, the company will add two matching 4,000-tonne mills at a new site near its existing mill to create its largest single location. An 1,800-tonne mill nearing completion in Daming will bring total daily capacity to 7,000 tonnes at the seven plants scattered mostly around the southeast quandrant of the town. In Jiangsu and another location in Shandong province, two mills will undergo 4,000-tonne expansions, and in Henan and Hebei provinces, another two locations will add milling lines of 3,000 tonnes each.

When the current phase of growth is completed, Wudeli Group will have 19 locations in the same six provinces as before.

In 1988, the company started with a 15-tonne short mill similar to thousands of others that were launched by local entrepreneurs at the time. It was not until 1996 that the company could build its first 200-tonneper-day plant. Two more of that size were built before the company scaled up again. The 200-tonne-per-day mill still operates profitably in Daming.

Dan pointed to a simple, time-worn formula underlying his company’s success: high quality flour produced at the lowest possible cost. The economies of scale already achieved have driven down unit operating costs, allowing Wudeli to profitably underprice its competition and generate cash to fuel expansion. Wudeli mills operate at about 90% capacity utilization, including maintenance, according to the chairman, while the average rate for all mills in China is just 40%.

Total employment is around 5,000, equivalent to 8 tonnes of wheat milled per worker per day. That will increase as much greater output is spread over a slightly larger administrative staff. Thanks to this high productivity, Wudeli is able to pay above average wages for the industry. And its inland location enables it to avoid some of the compensation for workers of China’s booming coastal region. About 20% of employees are women, working mainly in finance and laboratories, including a large central one.

Wudeli uses a state-of-the-art plant control system inside the company’s mill in Daming, China.

Dan noted that early in its history the company made a strategic decision to invest in the most advanced milling machinery and embrace automation wherever possible. Since 1995 the company has relied on Buhler Group as the principal technology partner for all of its mills.

WHEAT SUPPLY

Wheat supply is a key competitive advantage. Wudeli is based in Daming County in the southeastern corner of Hebei Province in the heart of the north China Plain, the world’s greatest wheat production zone. Less than 30 kilometers to the south is Henan Province with annual output of 37 million tonnes, and an equally short distance eastwards, Shandong province ranks No. 2 with 25 million tonnes. Home province Hebei, and Anhui and Jiangsu provinces occupying the southern and easternmost parts of the Middle Kingdom’s wheat belt combine for another 43 million tonnes to round out China’s top five wheat producing provinces.

The multi-province region is now crisscrossed by a modern network of divided motorways that mostly did not exist 10 to 20 years ago. Traders can quickly deliver wheat to mills in bulk trucks of 34 tonnes net. The company still accepts direct delivery from farmers as well, even when transported in bags, which has become rare.

Dan said almost all wheat farmers, however small, sell all of their production at harvest and buy flour for household consumption year-round. The north China plain is densely populated and staple foods like buns and noodles are wheat-based. Thus, the wheat zone is a major market for Wudeli’s flour. Raw material and finished product transport costs are low over such short distances on good roads, keeping costs and prices down.

Stable wheat prices resulting from predictable government purchases make business planning easier. China’s state grain agency, Sinograin, buys a large part of the harvest at a minimum support price in order to guarantee farmer incomes. The 2019 price is 2,240 RMB (U.S.$336).

The government’s large wheat reserves are rotated via regular auctions with an average price of 2,500 RMB that both depends on and influences the overall domestic market price.

Wudeli sends staff to take samples from the local storages owned or leased by the government grain organizations. Bids are placed online. Payment is immediate. At times the government wheat may be three years old, but Wudeli’s technicians can manage it.

By buying and storing wheat and selling mostly on a steady as-needed basis, the government significantly lowers the financing and working capital requirements of the private milling sector. Wudeli’s 3,000-tonneper-day mill in Daming, for example, has storage for 90,000 tonnes, just one month of inventory.

SALES AND MARKETING

Until recently, all production was sold under the Wudeli brand, which has become a household name in many parts of China. The brand encompasses the 20 to 30 types of flour on offer. These differ mainly in protein levels, ash content and functionality to meet the varying requirements of traditional noodle and steamed bun makers as well as western-style bakeries and households.

Wudeli Group consists of subsidiary companies by location. A sales center at group headquarters processes all orders from the 2,000 wholesale distributors that account for 80% of turnover. Some customers send their own trucks to the mill gate, but independent trucking companies are outsourced to deliver 34-tonne loads to distributor warehouses. Thus, the lack of need for a truck fleet either for wheat supply or flour shipments further simplifies Wudeli’s business model.

Rail is used to move flour to more distant destinations such as Shenyang, the largest city in the northeast. Dan estimated a 50% market share for Wudeli brand in Beijing, and 25% share in Shanghai, China’s two largest cities.

MANAGEMENT UPGRADES

Dan said the ambitious implementation of SAP enterprise resource planning software in July 2017 has heightened management capability for sales as well as inventory and processing operations.

Dan Zhimin, chairman of Wudeli, has helped guide the company to unprecedented expansion over the last decade.

Wudeli’s managers also cited the decision-making authority given to plant directors as a reason for superior results. The top person in each mill takes sole responsibility for its operations. This contrasts with the majority of state-run enterprises where most decisions are taken by committee, slowing response time and diffusing accountability.

WUDELI’S COMPETITION

Two other major agribusiness companies in China have pursued aggressive expansion strategies to increase market share in wheat flour but have struggled to keep up with Wudeli’s pace. Dan estimated that Singapore-based Wilmar Group’s wheat flour production is about two-thirds of Wudeli’s level, while state-owned COFCO is about one third. The top three companies combined now account for 30% of the wheat that is milled for human consumption in China, said Dan.

Wudeli uses Bühler roller mills to grind wheat into flour.

Neither company has Wudeli’s concentrated focus on wheat milling. Wilmar is China’s No. 1 operator of soybean crushing plants and seller of branded soybean oil. It launched a national wheat and rice milling strategy more or less simultaneously when its market share in cooking oil was unofficially capped over 10 years ago. COFCO is a kind of agribusiness national champion that has to some extent replaced global giants like ADM, Cargill, or Bunge for overseas sourcing of soybeans and grain. Wheat milling is a relatively small part of its overall business.

FUTURE OUTLOOK

Dan and his brother, chief executive officer Dan Zhiguo, the second generation of company leadership, are only 50 and 47 years old, respectively, so much could yet be expected of them based on their historic track record.

But China is a mature flour market. Dan Zhimin estimated national per capita daily consumption of 200 grams. This is unlikely to go up as increasing prosperity brings more and more dietary diversity. The country’s population also has stopped growing. Thus, when Wudeli’s doubled capacity gets fully utilized, its market share will rise to 30%, twice the current level. Down the road will the competition authorities allow further dominance, say to 50% market share, as is the case for the largest millers in some developed countries like the United States? Only time will tell.

The first mill at a port and introduction of a new flour brand, “Haomianyuan,” constitute only a minor deviation in the company’s strategy of the last 30 years.

Overseas expansion is a possibility, but it is difficult to name another country where Wudeli could operate at anywhere near the same scale as it does in China.

In any case, with 40,000 tonnes of new capacity to build and use at home, the world’s largest miller already has much on its plate for the next few years.

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