“We are always looking to work alongside customers in product development,” Davies told FoodManufacture.co.uk, as the company released healthy results for the first half of its financial year.
“We see opportunity going forward particularly with home baking to look at growth. It’s one category that is growing quickly.”
Davies said major supermarkets had already acknowledged significant sales increases in home baking and were focusing on it for further development.
The investment in Carr’s flour mills, particularly its new £17M Kirkcaldy site, which the company reported was now operating on schedule, would support such development, he said.
‘Flour accepted’
Commissioning began at the mill on September 1. “We were quickly able to get flour accepted by key customers, for example Warburtons, which has been really supportive of Carr’s,” said Davies. “We have been operating over the last four to five weeks at capacity there.”
The facility offered considerable food safety and technical improvements over older facilities, he added. For example, it had polished concrete flooring, whereas older-style mills had maple floors, which were more susceptible to contamination by bugs, he said.
Anne Margaret Crowe, analyst at Edison Investment Research, said: “The new mill makes it easier to ensure compliance with modern food standards, gives higher extraction rates and more flexible working, is more energy and labour efficient and benefits from a port-side location.
“This makes it less expensive to bring in the hard wheat required for bread flours from the other parts of the UK and overseas.”
Improved wheat harvests
Following improved 2013 wheat harvests, compared with 2012, Carr’s had been able to source a significant amount of wheat from the UK rather than overseas, which it had freighted by boat from Kent, said Crowe. This had saved an estimated £2–3 a tonne compared with road haulage, she added.
“Management expects to see a further improvement in the operational and commercial benefits from the new mill during the second half.”
Carr’s Milling Industries reported pre-tax profit up 2% to £10.1M in the six months ended March 1, 2014, compared with the same period last year. However, sales from continuing operations fell from £231.6M to £214.7M in the same period.
The company has acknowledged the Kirkcaldy mill has helped double profits in its food division.
“A modest increase in volumes was balanced by lower pricing, which reflected reduced commodity prices,” commented Crowe.
‘Pricing pressure’
“Pricing pressure from major food groups, which has been severe in previous years, continued to be an influence, especially for the Maldon mill, which is located in an area with numerous competitors.
“Pricing pressure from customers in Scotland and the Borders, where the group has an estimated 70 - 75% share of the independent market, appears to be relaxing as some customers recognise the benefits of the higher-quality flour output from the new Kirkcaldy mill.”
In addition to food, Carr’s Milling has agriculture and engineering divisions. The firm announced the acquisition of Chirton Engineering for £2.7M last week.