Investing in exports10/25/2007 When COFCO, China’s leading food group, plans to construct a factory for producing parboiled rice, it chooses Bühler as its partner. With its annual output of some 190 million metric tons of rice, China is by far the largest rice producer in the world. But only a relatively small percentage of this volume is exported. This is because demand for the rice varieties grown in China has so far not been very brisk in the international rice trade. In the world’s biggest rice importing regions such as Nigeria and the Near East, the rice consumed is almost exclusively so-called parboiled rice. This precooked type of rice has to date been essentially unknown in China.
Unlike white rice that has not undergone precooking, parboiled rice is characterized by its low sticki-ness and high resistance to cooking – properties that many rice consumers in the West appreciate. The parboiling of rice offers a considerable advantage in terms of processing: Cooking and subse-quent drying of the rice within its hull hardens the kernel. This appreciably increases the yield of whole rice compared with the processing of paddy (rough) rice. Parboiling of Chinese rice varieties allows whole-rice yields higher than 65 percent to be achieved, whereas the same variety not parboiled will only produce a yield below 30 percent.
In order to develop new export markets and to increase the yield and therefore improve the associated commercial advantages, the COFCO management decided in 2002 to build an integrated complex for making parboiled rice with a daily output of 1000 metric tons. Ms. Yang Hong, General Manager of the COFCO Rice Division, took charge of the project herself. For constructing the new production facility in the city of Wenzhen in the southern province of Jiangxi, COFCO signed a joint venture agreement with Jiangxi Jinjia Rice Co. Ltd., a major regional grain and vegetable oil processor.
Under the name of COFCO Jiangxi Rice Processing Co. Ltd., a factory complex was built over the next two years. It features a paddy receiving (intake) and pre-cleaning section, total bulk paddy stor-age facility with a holding capacity of 51,000 metric tons, a paddy grading installation, the parboiling system as the actual heart of the plant, and the subsequent drying unit with a rice mill and the final packaging lines. The new parboiling factory is equipped with a separate warehouse and a system for burning the rice hulls for steam generation.
A green field site
The new parboiling factory operated by COFCO was built from scratch on a green field site – a first in Asia at this point of time. Wenzhen, the site of the new facility, is located in the midst of a rice growing area, but far from any industrial infrastructure. Even for a company such as COFCO, this was a major business and supply chain challenge. For this reason, COFCO entrusted Bühler with the entire project coordination. In addition, Bühler was responsible for plant engineering and for the electromechanical equipment of the cleaning and grading installation, the bulk storage system, and the rice mill. Bühler’s quality assurance experts also assisted COFCO in selecting and auditing the quality of the subcon-tractors involved in the project.
Bühler: first choice
With its numerous showcase installations in India, Thailand, and Pakistan – the world’s main rice ex-porting countries – Bühler has an excellent track record and was therefore COFCO’s first choice. Three decisive factors ultimately favored Bühler as a supplier:
Production reliability: Rice supply contracts are signed for large volumes (15,000 metric tons per con-tract) and with strict time targets. Production losses must be minimized.
Uniform rice quality: Quality fluctuations are not accepted in the international rice trade. The price is based on a quality grade defined by ISO standards, which must be rigorously adhered to.
Yield: A high yield of whole grains is crucial to commercial success in the highly competitive export business.
COFCO has never had any second thoughts about choosing Bühler as a partner. The plant went into service on schedule in November 2004. It has been operating smoothly ever since. In 2006, COFCO exported the respectable amount of 180,000 metric tons of top-quality parboiled rice.