Buhler extends beyond milling to other products

Buhler Group's early-mover advantage in China is enabling the production plant manufacturer to go deeper into localization, especially in the grain-milling sector.

That not only means mill lines to mill flour but also to produce noodles, chocolate and wastewater-free baijiu (Chinese liquor).

The Swiss-based company opened its first representative office in China in Beijing in 1983 and its first joint venture in Shenzhen, Guangdong province in 1993. Today, China accounts for 25 percent of Buhler's revenue and employees. And two-thirds of what the company sells in China is made in China.

"After a few years, we realized this market is rapidly developing," Buhler Group China and Southeast Asia President Dieter Voegtli said.

Today, the 150-year-old company's largest factory in the world is in Wuxi. Buhler has 60 percent of the flour-mill global market share and 70 percent of China's market. The company entered Wuxi in 1994 with a joint venture established with the local grain bureau.

"We found a company that had a philosophy like ours when it came to flour grinding," Voegtli said.

"At that time, nobody would have guessed things would develop in Wuxi like they did. I was first in Wuxi in '95. If you told me we'd be here surrounded by these nice buildings, I wouldn't have believed you."

One of two China-based research and development centers are in Wuxi. The other is in Liyang, Jiangsu province, and works in animal-feed processing. The company is looking at opening another R&D center in Shenzhen.

"When a country starts developing, they typically increase the demand for high-quality basic food," Voegtli said.

"That's the first thing."

Research and development offers great prospects for Buhler in this realm.

"If you can get 1 percent more yield in a processing plant of our customers, that's where the money and profit for our customer is," Voegtli said.

"The new trend is automation because the flour mills can't find the people who want to do the hard-labor jobs. Automated packaging is the big thing. People won't do it anymore, even for money. You can't find them."

But Buhler's R&D extends beyond milling to include automobile die-casting, batteries and glass coatings. About 70,000 square meters of its total 160,000 square meters of property in Wuxi is of factory space, while the rest is mostly for R&D.

The company also operates a flour-mill training school in Wuxi. All Chinese who hope to be certified millers must train at Buhler's center for two weeks.

The company chose Xi'an, the Shaanxi provincial capital, over Wuxi as an expansion point for sifter production largely because of climate and culture.

"We wanted to be part of the going-west campaign. It wasn't about labor costs," Voegtli says.

"The sieves are wooden, and it's humid here in Jiangsu. That makes it hard to produce quality sieves. We'd need a climate-controlled room."

Also, Shaanxi falls within the country's "noodle belt". Noodles are a new company focus. The company's headquarters in Switzerland opened a Chinese noodle shop. "Most people don't understand there are more noodles eaten than pasta because China makes the difference," Voegtli said.

The company owns 50 percent of the market share of the global pasta-production machinery industry.

"Food safety and food hygiene is a big discussion" in China, Voegtli said.

"We're trying to find smaller local companies making noodles and train them in how to make it in a more hygienic way."

The trend is moving away from lower-quality noodles, he says.

"A lot of mills take the best flour to sell to customers, and the leftovers are used to make noodles," Voegtli said.

"People are demanding multigrain noodles. They want healthier ingredients. One trend everywhere - it doesn't matter if it's China or the US - is people have less time. They don't have time to make the noodles by themselves.

"This is a business opportunity for us. We want to take the technology we have and adopt it locally."

The company also hopes to refine the process of producing baijiu, China's overwhelmingly preferred liquor and a staple of business banquet culture. "Baijiu produces a lot of wastewater, We'll make it wastewater-free," Voegtli says.