Grains & Food: solid performance
Grains & Food: solid performance
In 2023, Grains & Food performed solidly. In a challenging business environment turnover fell by 3.1% to CHF 2,204 million, while order intake was down 0.7% to CHF 2,357 million. In local currencies, turnover increased by 2.2% and order intake grew by 4.8%. The ongoing war in Ukraine and the demanding economic situation in China worked as a damper in most of our businesses. Turnover growth was very much stimulated by the Chocolate & Coffee and Consumer Foods business areas; the global demand to improve food security was a key driver for Milling Solutions and Grain Quality & Supply. With the opening of new Application & Training Centers in Brazil and Switzerland, and the start of construction on a facility in Nigeria, Bühler reached a new level of capabilities to support our customers along complete value chains from recipe development and raw material to process and final product development and industrial scaling.
At year end, it was decided to streamline the Grains & Food structure further with the integration of the business area Digital Technologies into Milling Solutions and Grain Quality & Supply. Our Grains & Food segment is now comprised of the business areas Grain Quality & Supply, Milling Solutions, Value Nutrition, Chocolate & Coffee, and Consumer Foods.
Grain Quality & Supply
The Grain Quality & Supply business area enjoyed remarkable business development, both in orders and in turnover. In contrast to other businesses, China not only remained an important market but showed strong growth due to governmental efforts to improve food security for the country. This triggered the build-up of new infrastructure for grain handling and logistics, in particular along the main rivers of China. Bühler benefitted with several larger orders for ship unloaders and is now using its momentum to enter the market for grain storage facilities.
On a similar level, food security demand also led to multiple requests and orders in the Middle East and Africa. Grain Quality & Supply has built up a promising market position in this area. Its Malting & Brewing business unit won all major projects for larger malting installations, demonstrating clear market leadership. The globally low number of such projects – resulting from market consolidation – was compensated for by the new RimoMalt concept, which works as an entry plant for smaller malt processors or as a test facility for big players. Brought to market in 2022, RimoMalt gained resonance in 2023 with several orders, setting a new industry standard in the starter category and for malt production for novel food.
The Rice Solutions business unit started to rebound from a low level with its applications, notably in India and Europe. The market launch of the new modular rice milling concept, UniLine, enjoyed great market interest and a growing pipeline of orders. UniLine is a breakthrough innovation that offers fast and reliable end-to-end paddy-to-rice processing with up to 35% lower project execution time, 40% footprint reduction, and up to 15% energy savings.
Milling Solutions
Milling Solutions, the largest business area of Bühler, benefitted from a global catch-up demand for large milling projects for grain processing, including numerous greenfield installations. During the pandemic, most millers fully focused on high output ensuring that the food supply chain did not stop. This caused a two-year restraint in building new capacities, which is now ending, and millers are again investing in them. The drive for increased sustainability and the need to ensure food security has also bolstered the market.
Projects were awarded to Bühler from all over the world – United States, Saudi Arabia, Venezuela, Europe, Africa, and Southeast Asia, among others. In Hungary, Bühler commissioned a barley protein processing project for Pannonia Bio, which operates the largest biorefinery plant in Europe. Bühler provided grain storage and a barley mill – the world’s first high-capacity plant for barley protein concentrate − a premium ingredient for aqua feed and pet food.
To expand its share in the entry level market specifically in Africa, Milling Solutions launched the Evo Mill concept. Evo Mill takes a modular, overall solution approach, starting at a capacity of 300 metric tons/day and integrates selected partners for the building and silos, and the processing is handled by Bühler. Evo Mill is a concept that allows future expansion and can be extended to 600 metric tons/day. Another important milestone is the Arrakis roller mill – the successor of the world’s most sold roller mill, Airtronic MDDK. Over the years, Bühler has installed over 25,000 MDDK units. The Arrakis is the result of five years of R&D and is built on the learning from the success of the MDDK.
Looking at other parts of the Milling Solutions portfolio, oats and maize processing also experienced positive development. In 2023, Bühler commissioned a high-tech oat mill on the Kazakhstan steppe for Bakha Söhne LLP where they process homegrown oats. The request for pulse processing has continued to be high but potential customers were hesitating to undertake these big investments. After a few years of rapid growth, the market is also currently undergoing a first consolidation. Taking a mid- to long-term perspective, we are convinced of the need for, and the potential of pulses solutions.
In November 2023, Bühler opened the Protein Application Center in Uzwil – a collaborative space where customers can develop and validate their ideas in the field of protein processing. Equipped with the latest wet isolation techniques for the separation of protein, starches and fibers, the Application Center is operated in collaboration with our partner company endeco.
Bühler invested in innovation even during the market slowdown, developing superior process and automation technology, including the SmartMill, a digital service to optimize yield, increase product quality, improve traceability, reduce energy consumption, and increase overall plant efficiency. The SmartMill program supports customers' operations during the whole lifecycle of their investment. In 2023, 30 new milling lines were connected. A total of 80 milling lines worldwide are currently benefitting from Bühler’s smart solutions and the waiting list is growing.
Digital Technologies
After a somewhat positive course of business in 2022, the Digital Technologies business area experienced a slight decline in orders and turnover. The strong competition from Chinese vendors in the optical sorting market resulted in the continuation of the commoditization of this sophisticated technology and in a price battle in this industry.
To secure market position and future success, Digital Technologies not only initiated a consolidation of its portfolio and the ramp up of production capabilities in India and Brazil, but also introduced Merlin Ai, the new brain of Bühler’s Sortex optical sorting machines, which has been rolled out across various food and non-food segments including wheat, rye, pulses, coffee, seeds, peanuts, grains, oats, and plastics.
Digital Technologies also launched new optical sorting machines. The N BioVision is designed for the nut market and the SPARK Pro and SPARK Pro+. The SPARK series marks a breakthrough for Bühler into the contested low entry and cost sensitive market. As part of its transition, Optical Sorting will become a business unit within the Grain Quality & Supply business area in January 2024.
The Digital Sense business unit completed its new weighing and dosing portfolio. Meeting strictest requirements in terms of hygiene and precision, this portfolio sets a hard to copy new standard for the milling industry. In the area of packaging, the joint venture of Bühler and PremierTech successfully launched fully automated solutions, which are already sold into rice, malting, milling and feed applications. Due to the close link to milling, the Digital Sense business unit will be integrated into the Milling Solutions business area effective January 1, 2024.
Value Nutrition
Value Nutrition experienced declines in volume due to difficult market conditions. In its feed business, China as the largest market, is facing overcapacities and very low pork prices. This has put prices under pressure and reduced the investments in new processing lines substantially. Other feed markets such as the Philippines and other countries in South East Asia and the Middle East Africa & India region continued to develop well. With new digital services such as PelletingPro Bühler has strengthened its position in this strained market. Optimizing processes, PelletingPro increases yield by up to 1% and throughput by up to 20% and decreases energy consumption by up to 20%.
Due to the continually low demand for pasta and cereal solutions around the world, pasta, noodles, and cereals showed mixed performance. The pet food market developed well, as the demand for high-quality products continued to increase. In all areas, the demand for upgrading existing installations has increased and the retrofit business has developed into a strong business pillar for Value Nutrition.
The plant-based protein market was very complicated in 2023: market capacities were filling up, and the market consolidation continued. Bühler took this as an opportunity to invest in a unique application lab infrastructure to serve our customers even better as a full solution partner. In Uzwil, Switzerland, we opened a Protein Application Center covering all relevant processes for the extraction of proteins, fibers, and starches. How Bühler can build up fully integrated solutions can be observed at our Hungarian customer Helvét-Farm, for whom we have engineered and installed a plant covering the full value-chain from “bean to burger”, meaning from the raw material processing right through to the final product. At the same time, in partnership with Cargill, Givaudan, the Institute of Food Technology (Ital), and the FoodTech HUB Latam, Bühler opened the Tropical Food Innovation Lab, for the development of sustainable food and beverages targeting the large Brazilian market.
Chocolate & Coffee
Based on a strong order backlog from 2022, the Chocolate & Coffee business area performed very well in terms of turnover as well as with stable order intake volumes in 2023. The Chocolate & Coffee business area has two business units, Chocolate and Flavor Creation. The good development overall was due to an upswing in the Chocolate business unit which accounted for the bulk of new business in 2023.
The Chocolate business unit particularly benefitted from the high demand for confectionary in the United States. Success for the business unit was also driven by roll-refurbishment services, as well as significant projects won, such as Flexway in Dubai, a Middle East distributor of sweets and candies, confectionary and snacks, and the chocolate producer Neugebauer in Brazil. Innovative solutions such as autonomous refining, the predictive roll service, and the Bühler Insights platform positively impacted the business.
The Flavor Creation business unit, which combines the three market segments, Coffee, Nuts, and Cocoa, also experienced positive development. The Coffee segment benefitted from innovative solutions to win projects like Jasmin Coffee in Oman and Saudi Coffee in Saudi Arabia. In August 2023, Bühler partnered with the UK-based company IKAWA, the market and technology leader for sample roasters, to focus on the innovation gap between micro- to medium-scale coffee roasting. This partnership not only facilitates access to new markets and projects, but also provides insights into the evolving needs of the industry. In the last quarter of 2023, the Coffee segment already experienced increased interest in roasting solutions stemming from this partnership.
While the Cocoa segment was impacted by rising cocoa prices, which reached an all-time high of USD 3,800 per metric ton, it benefitted from modernization projects. The Middle East, Africa and South America also invested in modernization projects to increase performance and output and lower energy consumption. In the Côte d’Ivoire, the world’s leading cocoa producing country, Transcao invested in upgrading their existing processing facility in San Pédro. In line with Bühler’s strategy of protecting the environment with energy-efficient machinery, the new RoaStar for cocoa was launched. It consumes up to 50% less energy, features a smart heat-recirculation system, as well as enhanced heat distribution.
In November 2023, the Flavor Creation Center was opened in Uzwil, Switzerland. The center, which has been processing coffee since 2013 and cocoa and nuts since 2022, was upgraded and renovated to assist customers in recipe development, performance optimization, and offer premium training courses. The opening of the Flavor Creation Center coincided with increased customer interest in exploring new product development options, such as vegan and reduced-sugar chocolates and alternative raw materials to imitate cocoa flavors.
Consumer Foods
The Consumer Foods business segment was integrated into the Grains & Food business segment in January 2023, becoming a newly combined business area. The Consumer Foods business area, which provides processing solutions for biscuits, wafers, and confectionary products performed very well with strong turnover growth and a solid development on orders. The demand came from all business units: Wafer, Biscuit, and Confectionery. The regions Middle East Africa & India and Europe contributed most to new orders.
Even in fast-changing consumer markets, Bühler supported its customers with state-of-the-art solutions. In 2023, many customers requested retrofits on wafer lines to reduce energy use. Innovative solutions to improve sustainability played an important role for the business, for instance electrically heated and induction-ready ovens to allow to switch to green energy and to lower the CO2e footprint. The SWAKT-Eco wafer oven consumes, although still gas fired, 20% to 25% less energy and hence CO2e generation. The latest electrically heated ovens consume around 10% less energy and on top of that, the remaining 90% can be fully CO2e neutral, depending on the way the electrical energy has been generated.
A highlight for Consumer Foods in 2023 was the opening of the Food Creation Center, which is embedded in the Application & Training Center network in Uzwil. In this unique network, all Consumer Foods industry solutions are available and can be combined to develop the confectionary products of the future.
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