From little mill to big player

From little mill to big player


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Manildra Group managing director, John Honan with his sister and fellow director Caroline Honan and their father and board chairman, Dick, at the company’s Sydney head office.

Manildra Group managing director, John Honan with his sister and fellow director Caroline Honan and their father and board chairman, Dick, at the company’s Sydney head office.

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WHAT started as Australia's smallest commercial flour mill back in 1952 has turned Manildra Group into one of the country's most successful family agribusiness operations.

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WHAT started as Australia's smallest commercial flour mill back in 1952 has turned Manildra Group into one of the country's most successful family agribusiness operations.

The company's founding flour mill at Manildra on the Central West Slopes had just 800 kilograms an hour of grain milling capacity when Sydney-based stockfeed buyer Jack Honan borrowed 24,000 pounds to buy it.

Today it is the world's 10th largest flour mill processing more than 2000 tonnes of wheat a day.

The business now buys more than 1.5 million tonnes of wheat a year, and employs 1200 people.

The tiny Manildra mill was originally built at Cobar, but dismantled and moved in 1906, sited alongside the western railway line.

Rather than compete head-on for Sydney's bakery market against an increasingly powerful group of bigger flour millers, Jack Honan set his company on its trademark value-adding course, building a starch plant at Auburn in 1966.

An innovative businessman from the start, his relationship with the bush had begun while working at the Homebush State abattoir.

From there in 1948 he took up a chance to begin selling rendered meat meal from the plant to pig and poultry producers, later driving west of the Blue Mountains to source grain for his farm produce business, before seeing an opportunity in the ageing Manildra mill.

After establishing export markets for industrial starch and gluten in the UK, Manildra's starch operations expanded with the purchase of its then-modest Nowra plant in 1968.

The Auburn and Nowra sites eventually consolidated in the 1980s, becoming one of the world's largest starch and gluten plants.

Among other markets, Manildra now supplies about 40 per cent of the US's imported "vital" wheat gluten needs.

Total exports of Manildra's flour, gluten, starch and distiller's products have totalled almost $2b in the past seven years.

The company is now headed by chairman (and Jack Honan's son) Dick.

He began working in his father's stockfeed business at 14, becoming a flour salesman in 1957 and buying out his dad and younger brother Gary in 1984 to guide Manildra to even more growth locally and overseas.

A third generation of family members and their spouses now manage various aspects of the business, with John Honan the managing director and his sisters Caroline and Samantha also directors and holding marketing roles.

At the original Manildra mill ongoing upgrades have included two additional new milling plants installed within the past 20 years, accompanying the reconstruction and expansion of the Gunnedah flour mill (bought in 1972) and the purchase of a third mill site at Narrandera in 2002.

In the late 1980s Manildra Group diversified into ethanol in the US (where it had earlier bought a starch plant in 1979), and built a $53 million sugar refinery in partnership with the NSW Sugar Milling Co-operative at Harwood Island, giving NSW canegrowers direct access to the domestic market.

Australian ethanol production for the fuel, pharmaceutical and printing ink market commenced at Nowra in 1992 and was significantly upgraded eight years later.

"I'm proud of the fact we've invested our profits back into growing the business in regional areas during the past 30 years," Dick Honan said.

"We're not just fully utilising 100pc of the wheat grain, we are now also crushing canola, buying barley for stockfeed and now sourcing sheep and cattle from farmers we've dealt with for years."

Joint venture partner at MSM Milling, Peter MacSmith, believed Manildra Group's determination to keep expanding its agricultural value-adding activities was refreshingly reassuring in a sector where local food processing growth was uncommon.

"And Bob and I couldn't have hoped for a more helpful mentor or experienced sounding board for our business ideas than Dick Honan."

The story From little mill to big player first appeared on Farm Online.

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