SYDNEY, AUSTRALIA — Per capita wheat consumption in Australia is stable and population is steady, but the country’s highly concentrated flour milling sector is still investing to keep its plants efficient, environmentally friendly and at the cutting edge of technology.

The International Grains Council (IGC), in its June 23 Grain Market Report, put Australia’s 2022-23 wheat production at 30.6 million tonnes, up from its earlier estimate made the previous month of 29.9 million. The previous year’s crop was 36.6 million tonnes. the country’s wheat exports are put at unchanged, both from earlier estimates and the previous year’s level.

In an annual report on the grains sector, dated April 25, the USDA attaché said that “domestic consumption for flour milling is expected to remain unchanged from recent past years at 3.5 million tonnes in marketing year 2022-23.”

“Consumption of wheat for flour has typically only been increasing with population growth, which is expected to remain relatively flat in the short term,” a US expert added. 

ATMA puts the annual domestic consumption of flour in Australia at around 1.5 million tonnes, with a further 440,000 used for industrial purposes such as starch and gluten.

The history of the Australian flour milling industry has been a long one of consolidation. According to the Australian Technical Millers Association, there were more than 500 flour mills in Australia in the 1870s, with most large country towns having their own mill. Improving technology, the construction of larger plants and the reduced number of export markets for Australian flour as developing countries established their own milling industries, led to a long-term trend of consolidation, and now the sector has, according to the ATMA, approximately 30 mills that are spread around the country. 

“This continuous trend of fewer but larger capacity mills with fewer employees is common to countries with highly mature milling industries,” the association said. “However, with the growth in Australia’s population, demand for flour products at home has increased steadily.”

The ATMA puts the annual domestic consumption of flour in Australia at around 1.5 million tonnes, with a further 440,000 used for industrial purposes such as starch and gluten. It also said a varying tonnage of flour products are exported. 

The association puts total production of flour at around 2.1 million tonnes, and noted that around 60% of flour sold for human consumption is used by commercial bakers, adding that millers have to use wheat.

“Unlike other end users, there is not the luxury of being able to substitute other grains,” the ATMA said. “The flour milling industry therefore has a vital interest in the sustainability and profitability of the Australian wheat industry.”

Domestic use of the wheat crop accounts for 25% of the typical crop each year, the ATMA said.

“Clearly this is a significantly higher percentage in low yield years,” the ATMA said.

The domestic requirement rises in the eastern states of Queensland, New South Wales and Victoria, to 45% of the crop, leaving 55% for export. The ATMA stresses the need for a reliable supply of a full range of wheats to enable millers to produce flour with the varying characteristics required by individual customers. 

The big three

There are three big players, in particular: Mauri, which is part of George Weston Foods (GWF), itself a division of Associated British Foods; Allied Pinnacle, owned by Nisshin Seifun Group, part of which is Nisshin Flour Milling, the largest flour miller in Japan; and the Australian family-owned Manildra Group. 

In May 2022, GWF announced plans to build a new flour mill in the Ballarat West Employment Zone, in the state of Victoria. The company said the new mill would create 174 new jobs in Victoria and transfer 46 jobs from GWF’s existing flour mill in North Melbourne. The new mill is part of an investment totaling A$132.9 million (US$89.3 million) by GWF in the state. 

As well as the new flour mill, it is adding a Tip Top boutique bakery in Bendigo, relocating its Golden Crumpet manufacturing line from Adelaide to Dandenong, upgrading its Don KRC business in Castelmaine to increase exports and expanding its Yumi’s plant in Hallam to increase production.

“We are excited to be investing in the future of sustainable agriculture and food production in Victoria,” said Stuart Grainger, chief executive officer of GWF. 

“This new flour mill, together with other investments, enables us to continue to grow our Tip Top, Abbotts, Don and Yumi’s brands while also being able to serve the needs of our Mauri customers,” he said.

Also in May, Manildra Group received news of A$85 million (US$57 million) in funding to build a cleaner power plant running on natural gas instead of coal, significantly reducing its emissions. The investment is being made on behalf of the government by the Clean Energy Finance Corp. It will form part of a A$190 million (US$128 million) project to build a cogeneration power plant at the company’s Shoalhaven Starches plant in Nowra, New South Wales, the global leader in the production of vital wheat glutens, modified proteins, wheat starches, syrups to ethanol and animal stockfeed. 

The new power plant will cut emissions at the energy intensive site by some 40%, a reduction of an estimated 332,000 tonnes of carbon dioxide per year. The new plant will be completed by early 2023. The installation of cogeneration technology will reduce emissions at the energy intensive Nowra plant by about 40%, abating an estimated 332,000 tonnes of CO2-e annually. Manildra will no longer use coal to generate steam at the plant. 

Work on the plant will start by the middle of the year and is expected to be completed by early 2023.

John Honan, managing director at Manildra Group, explained that “employing more than 350 people on site, our integrated manufacturing process relies on heat (from steam) production to power our operations, day-in, day-out, 365 days a year. We’re very proud to work with the CEFC.”

“Their support has enabled Manildra Group to increase cleaner energy sources, substantially reduce our greenhouse gases and reduce coal usage entirely,” he said.

Ian Learmonth, chief executive officer of CEFC, described Manildra Group as “a globally competitive family business that recognizes the financial prudence of long-term investment in lower carbon fuel to power production.”