NFM on the rise: New packaging lines make dough for shareholders

NATIONAL FLOUR MILLS (NFM) has come a long way since its beginnings in 1966.

Back then it was called Trinidad Flour Mills. It had a staff of 28 people and provided one product, flour, to Trinidad and Tobago.

Now, some 58 years later, NFM is not only a national institution that provides flour, feed, dry mix products, pet food, oil and a range of ginger teas, but it also has expanded to serve the region and several parts of the world.

NFM, now 400 workers strong, exports to Barbados, Jamaica, St Lucia, Grenada, Antigua and Barbuda, Anguilla, Dominica and parts of the Bahamas.

Speaking with Business Day on March 19, NFM chairman Ashmeer Mohammed said the company plans to rise to even higher standards with a drive to continue its product innovation and improve efficiency by updating its machinery and investing in its people.

Innovations to benefit customers

Mohammed said, "We see ourselves continuing to be a major producer. We are going to keep adding lines and innovating on products and adding value."

He said through its dry mix segment, NFM has been able to innovate on traditional recipes to manufacture on a commercial scale and market it to customers at competitive prices.

Products such as the pholourie mix, the fry bake mix, cassava flour and cake flour are some of the innovations that have gained popularity in TT and the region.

"It makes life easy for consumers," he said. "You just add water.

"We specialise in products that give the consumer better, more nutritional value and we do it at a commercial rate, so the prices are very reasonable."

The dry mixes were commended on March 18 at the launch of NFM's two newest improvements – the installation of a two-kilogramme flour packaging line and a standing pack packaging line – which came at a cost of $25.6 million.

An additional line for ten-kilogramme packages is expected to be installed by the end of May.

CEO Ian Mitchell in his remarks at the launch of the lines said the dry mix category was one of NFM’s fastest-growing lines.

"Customers seek greater convenience whether at home or in the commercial bakeries and the prepared mixes, baking powders and other dry mix products have become essential staples for many," he said.

The packaging for many of its products is an innovation in itself, Mohammed told Business Day.

"With the pouch packaging that we are producing, especially the baking powder and icing sugar and other products, the pouch is resealable.

"When you open a bag of baking powder you would have had to store it in a container. Now you are getting a pouch that you can reuse and seal it.

"So we are helping consumers get their products straight to the table."

Mohammed said the newly-installed packaging lines increase efficiency significantly, which will bring even more value to the customer.

The two-kilogramme line is fully automated. Starting with sheets of paper with packaging details printed, the line forms the bag, fills it, seals it, then moves it over to be shrink-wrapped and then a robot arm packs it on a palette to be sent for distribution.

The standing pouch line takes the pouches, opens them, fills and then sends them for packaging.

"The new lines allow us to increase our sales and, in certain areas, it also allows us to reduce the cost of production. That is a saving for us and the consumer.

"That's how we were able to lower our prices," he said. "I think we are the only industry that has dropped prices after covid19."

Selling flour, making dough

Despite a list of challenges over the past seven years, NFM has been able to maintain profitability.

As far back as 2018, with the swine flu ravaging Japan’s pork industry, NFM’s ability to access wheat and other grains for flour and pet food production was affected, as Japan sought to revive its pork industry by buying surplus grains to feed its piglets.

In 2021, then chairman Nigel Romano noted that increased costs of raw materials, which were affected by the worst crop of wheat in 33 years, had attributed to significant declines in profits. The year 2022 was also a challenge with the start of the Russia/Ukraine war disrupting lines of wheat coming from the Black Sea.

In 2022, the company reported a profit after tax of $6.9 million. In 2023, it saw a massive turnaround, reporting $35.5 million in profits.

In August last year, it reported after-tax profits of $20.5 million, a 29 per cent increase in profits over the same period the year before.

In May of that same year, NFM announced a reduction in the cost of retail flour products across its entire range of retail products. The company had been reducing prices since Christmas 2023.

Mohammed said the company now has a system to deal with the global shocks that could be detrimental to the company and the country as a whole.

"We have a system where we book and pay in advance for our grain," he said. "We have confirmed contractors for our grain, so we won’t run into problems.

"We have devoted an entire department to buying at the correct time and getting the best possible price and all these other aspects. That is a science by itself."

He said it takes a lot of planning and forecasting to source grain at a competitive price, to carry those savings on to the consumer.

"You have to ensure you have reliable sources, not only for the actual product but even with the transportation system. All of that has to be taken into consideration."