The highest international food safety certification a company can acquire is Safe Quality Food (SQF), Level 3. National Flour Mills Ltd. of Trinidad & Tobago is working toward it now.
National Flour Mills of Trinidad & Tobago is one of many suppliers down the food chain responding to new quality standards required by their customers. In order to meet the sustainability expectations of such customers as Burger King, Kentucky Fried Chicken, and Papa Johns, as well as their own high standards of excellence, this government-owned company is working to obtain SQF Level 3 certification.
Safe Quality Food (SQF) certification is the international standard that guarantees that the food we buy is safe to eat. Level 3 is equivalent to the combination of ISO 22000 and ISO 9001. Technically, the standard applies only to human food products, but National Flour Mills is qualifying the entire company. This consists of two main operational divisions, namely food-grade grain and rice products, and dry pet foods.
National Flour Mills, Ltd. (NFM) was incorporated on September 30, 1972, with majority holdings by the Government of Trinidad & Tobago. In 1980 the government bought out its other two shareholders and the company became a wholly owned state enterprise. In 1995 it listed on the stock market, with the government owning 51% and 49% open to the public.
NFM is now the largest producer of flour products in the Caribbean and a major player in pet food. Its sells locally and regionally (where it holds 60% of the market for flour products) and some outside of the region, like fish food to Surinam and Guyana.
Most of its raw grains are imported from the United States, rice bran is imported from Guyana, and its chemicals and additives come from elsewhere. Recently the company purchased a Trinidadian rice farm, and it is currently developing products that use local cassava root. Other than the rice farm, the company is not vertically integrated and has no intention of becoming so, according to CEO Mr. Kelvin Mahabir.
In a February, 2016 phone interview Mr. Mahabir informed us that, “The market is much different now than it was five years ago,” which necessitated a change to a more sustainable and commercial way of operating.
Mr. Mahabir was hired in 2014. He is well qualified to transform the company, having 30 years of experience in private sector manufacturing, plus being a Chartered Accountant and having a Masters degree in Business Administration. Since he took the helm, the company has changed its culture and doubled its profitability.
One of the difficult aspects of operating in Trinidad, he says, is the volatility of oil and gas prices. Government GDP depends heavily on revenues from fossil fuels production, as do those many local companies converting and creating products from crude oil and gas. A depression in this section limits foreign exchange, which can hurt trade as a whole.
NFM is combating this trend by becoming a more efficient producer, diversifying its products, and securing supplies in advance. Company analysts carefully watch the prices of grain and other supplies, so they can purchase futures a year ahead of actual need. They have also applied a rigourous oversight of their supply chain to find other ways of reducing costs and making it more secure.
Efficiency is a key component in qualifying for SQF certification. It requires whatever changes are necessary to prevent the contamination of food. National Flour Mills expects to spend US $25 million on upgrades. These will include staff retraining (critical), increasing security, reducing traffic between plants, and improving quality of online operations.
The company’s feed operation system is old, requiring a decision as to whether to upgrade or build a new plant. In 2008 it waterproofed all of its silos (3,000 square metres) using a food safety product manufactured by Radcrete in Sydney, Australia. The company is also diversifying products on the animal feed side of operations to make it more elastic, all of which helps NFM succeed in a more competitive local environment.
The food side of operations was already state-of-the-art, with a fairly new plant that was subsequently upgraded and can now be operated via a laptop at home. In 2014 NFM upgraded its grain transport system. The company has already been managing its energy use and measuring carbon emissions, and any new plants will meet all modern green standards, according to Mr. Mahabir.
Staff retraining started in 2014, which included a new employee productivity system that triggers a quarterly bonus. By the following year it was already showing results. In the first quarter of 2015 productivity went up 10%, revenue improved by 21%, and profit after taxes increased 372% over the same period the year before. These changes were helped by a reorganised management structure that required key business units to report directly to the CEO.
The company also hired a new Manager of Corporate Security to help strengthen its security systems, protecting product integrity and safety throughout the facilities. And it integrated its human resources, accounting, production, inventory, procurement, and sales departments with appropriate technology and software upgrades. To further motivate workers, the company significantly increased its annual technical and vocational scholarships to their eligible children.
Not required by the SQF standard, but still a part of sustainability is the way the company affects communities in which it operates. NFM helps promote local food related events, culinary schools, elementary schools, cultural and religious celebrations. In 2013 the company gave financial assistance and donations of products to more than 130 local communities and charities.
An example of the kind of support National Flour Mills gives is its donations to the Guaico Government Primary School. The school’s principal sent a letter requesting NFM’s support in enhancing the academic performance of its students. These low income, single parent children were interested in agriculture, so the company donated 45 kg bags of feed to help with rearing rabbits and chickens at school, and distributed brochures showing nutritional facts and feeding guidelines for all animals.
The Board Chairman of National Flour Mills states in the company’s 2014 Annual Report that “no plan can be termed a success unless the objectives are secured permanently.” Establishing oneself as a long term, contributing member of the community is one way of permanently securing objectives, and acquiring SQF certification (generating the approval of customers and the potential for increased trade) is another.
Written by Susette Horspool
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