E-Malt.com News article: 1889

USA, Great Falls: Work on a $60 million barley malting plant is progressing smoothly, and barley buying from Montana growers could begin as soon as next year, top officials of the International Malting Co. said on December 03, according to a report of Great Falls Tribune. Speaking to more than 150 people at the Montana Grain Growers Association in Great Falls, Damien Lesaffre, president of International Malting, said the plant north of the city should open in mid-2005.
"We are moving forward," he said. "We are right on track."

Once the plant is operational, it will reach full capacity quickly, meaning it will need barley produced in 2004. The company said the plant will consume 11 million bushels (239.5 thousand tones) of malt barley each year. Annual malt production is expected to be 12 million bushels (about 185.2 thousand tonnes).

How and when International Malting will buy barley was of high interest to grain producers. "I think initially we may have to bring in some barley from North Dakota," said Dale West, International Malting's chief operating officer. "Ultimately, we would like to see all the barley come from Montana." While the company likes to experiment with different types of barley to meet customer needs, officials said the plant would initially use barley varieties currently grown in Montana.

West said International Malting would work with individual growers and elevator companies to buy barley. Details of how the contracting process will work are still being worked out, he said. Malting barley producers in northcentral Montana often contract with brewing companies, such as Anheuser Busch. "However we do it, your contract will be with us," West told potential growers, noting limited 2004 purchases could be made through open-market contracts.

Dryland and irrigated barley will both be part of the product mix sought by International Malting, officials said. While there was little discussion of possible prices On December 03, International Malting officials said the plant will need to compete in the world market to be successful. Producer prices, production costs and logistics will all play a role in the plant's competitive position. "It's the people that are going to make this work," West said. "We can't make this work without you."

The Lesaffre Group is the fifth largest producer of industrial malt in the world, with eight plants in Europe, Canada, Australia and the United States. The Great Falls plant, at 12 million bushels, will boost the International Malting's current U.S. production of 29 million bushels by about 42 percent. International Malting is a joint venture of the Lesaffre Group and U.S. agri-industry giant Archer Daniels Midland.

While International Malting has plants in Chicago, Milwaukee and Winona, Minn., the Great Falls plant will help it serve brewing industry customers in the western U.S. "The brewing industry is moving west," Lesaffre said. "We are following our customers. We have no choice." The availability of high-quality water and barley, along with the support of government officials and the ag industry groups, lured the company to Montana, the officials said.

While the brewing industry is seeing slow growth in the U.S. and Canada, markets in Russia, China, Southeast Asia, Mexico and other Latin American countries provide good growth and malt demand. "The future of the beer industry is in these countries," Lesaffre said.

Along with brewers, International Malting plans to sell malt made in Great Falls to distillery customers such as Jack Daniels and Jim Beam. Kraft, Kellogg's and other food makers also are likely customers. Lesaffre and West also said the Great Falls operation should allow it to sell malt in Canada, music to the ears of grain producers, some of whom believe that subsidized grain from north of the border is being "dumped" in the United States. "I'm confident we can compete with Canada," West said. "Otherwise, we wouldn't be here."

The officials said the Lesaffre Group studied the Great Falls plant location at great length before deciding to build. "Great Falls and Montana is a long-term strategy for us," Lesaffre said, adding being family-owned gives the company "the advantage of being able to make long-term decisions."


08 December, 2003