30 May, 2008
Sylvia Macdonald speaks to Rank Hovis wheat procurement director Gary Sharkey about his career path and wheat supply challenges
== What was your route into the milling industry? ==
I went to my local grammar school in Lincolnshire and left aged 16. I was playing football for Bourne Town and hoping to turn professional, but I damaged my anterior cruciate knee ligament. Many of my friends were going to university but I decided I would try to achieve the same salary as they would by the time they started their first job. My first job was as assistant transport manager at a grain trading business called Briggs, Duncombe and Reames (BDR).I saw those making money were traders, so I became a trader in the firm and went in at 6am each morning to grade barley samples by hand. Then I went to the markets with samples and queued in front of maltsters to obtain a bid.That's how barley used to be traded. Some traders were really tough; they'd take a bite to evaluate the quality, and throw the balance of the sample on the ground, so none was left for competitors to sample.== So you got the milling bug? ==Yes, next I moved to Soufflet, a French flour miller, maltster, maize processor and trading business. After a few years, I progressed to running their northern office, then I was asked to set up a trading business for brewer Scottish & Newcastle, to contract local malting barley from farmers.Three years later, I returned to BDR to jointly head up milling and wheat trading. We were bought out by a business that eventually became Grainfarmers, which markets grain for farmers, co-operatives through central storage sites. It is the second-largest grain trading business in the UK for buying and selling and also sells seeds, chemicals and fertiliser to farmers throughout the UK.== Were you keeping pace with your university graduate friends? ==Yes, I had overtaken quite a few. Grainfarmers is one of the largest suppliers to Rank Hovis and other mills, so when Peter W Jones, who was well-known by all the industry, retired four years ago, I was invited to apply for the position.== What are your day-to-day responsibilities? ==They vary enormously. But key to it all is identifying opportunities and buying wheat at the right price on a short-term or long-term basis.The team is also responsible for buying wheat germ (flecks), gluten and sales of the milling co-product, wheatfeed.The markets are seeing unprecedented volatility, so to say it is an 'exciting' job is something of an understatement. It's important to keep a cool, calm head.== Do you sit on any committees or have any other roles to play? ==I sit on the European Millers Commercial Committee - a forum for millers to discuss import levies, for example, or issues of commonality. We then engage with the EU Commission Agricultural Department.== What about in the UK? ==Over here, I sit on the Cereal Evaluation Ltd Board, which assesses and approves new wheat varieties and communicates their benefits to growers.I also chair the National Association of British and Irish millers (nabim) Wheat Commit-tee, which meets quarterly. We go through industry issues: import taxes, wheat quality, transport and logistics.== Who keeps the media informed about what is happening? ==As chair of the nabim committee, that falls to me. I provide various media contacts with the relevant market information, so that they report accurately to the wider audience.== What is the wheat and flour situation looking like at present? ==Things will remain volatile. It is a continuously evolving picture, because of the spread of harvests around the world and their different cropping seasons. It means that, every month of the year, the dynamics change. In fact, no two days are the same; it is extremely challenging.== Do you travel much in your job? ==Yes, and one of the key fascinations is meeting people and seeing allegiances. For example, the Italians are buying a lot of Ukrainian wheat at the moment. I also like to see facilities and to know that suppliers are financially stable - you don't want to have to replace wheat at short notice because a supplier is unable to meet his contracted obligations.I spend about one to one-and-a-half days in my office each week. I usually arrive at 7am and leave at 6pm. Duties include hosting foreign visitors (recently a delegation from China wanting to compare UK milling and procurement with their processes), direct market analysis with traders in other countries and developing closer relationships with suppliers throughout the world. There are various opportunities to meet members from the trading and milling companies throughout the year.== What is the biggest challenge at the moment? ==Undoubtedly the rise of the wheat price since last May; briefing our various sales teams on the continuous market movements and helping our customers understand the dynamics.== Do you believe in global warming? ==Yes, an increase of 1-2?C does make a difference. It makes for extremes - flooding over here last July, for example, and six years of drought in Australia. Events like that are the main cause of instability. Wheat needs the right moisture and temperature at the right time.== The causes of the recent flour price increases are well attributed, but are they accurate? ==Yes, as well as a volatile climate, there is increased demand for wheat products - not just breads and cake products, but pasta too - in all the rapidly developing countries such as China, India and elsewhere. Plus, we all want to eat more meat and animals require grain to feed on. So if you are growing grains for animal feed, you are not planting bread milling wheat.The same situation applies to biofuels. Farmers in the US, in particular, have been receiving subsidies to grow grain for bio-fuels. Also, there are more players in the financial markets taking a view and gambling - all are adding to the shortage and cost of wheat and, therefore, flour.== Do you feel for bakers having to experience big flour price rises? == Yes, I do feel empathy with bakers. Some like Robert Dawson of Dawsons in Nottingham, are very adept at analysing market trends. Bakers have to educate themselves and I enjoy helping if I can.== What might be your next job or promotion? ==I would like to manage one of the business units. I may have moved on sooner without the recent changes in the market. Short-term, I will be taking on Jon Tanner's responsibilities for sales and marketing as well, as he leaves to join Calor Gas as their sales and marketing director.== How did you feel about the Premier Foods takeover? ==I felt a degree of scepticism, because they were taking on a business larger than themselves. However, they have an extremely passionate senior management team, who really care about making good food. They are supportive of their people and open to dialogue.I can pick up the phone and talk to any of the senior team, who are engaged, trusting of other people and value our opinion.== In another life what job might you be doing? ==If I couldn't do this, I'd enjoy being a supermarket buyer. I also like the outdoors, so farming - arable mixed with live- stock - appeals.== Any time for sport? ==I go to the gym, play squash and enjoy my motorbike.== What's your favourite holiday? ==I love skiing and, in summer, I like to get away from it all somewhere hot. I like new and quiet places. Years ago, we were on the second-ever Jumbo Jet flight to land in the Dominican Republic. And on one trip, to Puglia, Italy, it was ideal. We only met one other English-speaking couple in two weeks.== What's your favourite meal? ==A good, well-aged English steak with salad or Indian or Italian food.== What do you enjoy reading? ==I spend up to three hours a day reading overnight grain reports! But I also enjoy biographies, including Roy Keane, who now manages Sunderland. I have always supported Manchester United and, on a recent trip to Switzerland, met Sir Alex Fer-guson who was staying in the same hotel. I just couldn't have planned it!----=== Rank Hovis: a potted history ===Rank Hovis is the UK's leading flour miller. Its portfolio includes a comprehensive range of flours and mixes and two of the UK's well-known brands, Hovis and Hovis Granary. The company is part of the Hovis division of Premier Foods.A brief history of the firm runs:1875: Joseph Rank first sees the potential of grinding wheat with steel rollers in preference ot millstones1885/86: Rank builds his first roller mill in Hull1889: Joseph Rank Ltd is formed1933: the company is listed on the London Stock Exchange as a public company called Ranks Ltd1962: Ranks Ltd acquires Hovis McDougall to become Ranks Hovis McDougall (RHM)1992: the company is acquired by Tomkins plc and is subsequently delisted from the London Stock Exchange2000: RHM, including Rank Hovis, is sold to private equity firm Doughty Hanson2005: Rank Hovis acquires a mill at Wellingborough, Northants. In the same year, RHM is relisted on the London Stock Exchange2007: RHM is acquired by Premier Foods in a deal worth £1.2bn
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