ABF poised for US manufacturing growth

Associated British Foods, one of Europe's largest food conglomerates, has chosen Denver, Colorado, as the headquarters and manufacturing hub for its newly established US bakery operations.

Associated British Foods is staking the future of its Cereform bakery division on an its newly acquired bakeries ingredient plant situated in North Denver. The plant opened earlier this year and now sells brownie, cake and muffin mixes to the tune of €40 million a year, supplying wholesale bakeries and catering suppliers.

"We hope to double the size of the business over the next three years and then look for new manufacturing areas across the US,"​said Colin Simmonds, Cereform's chief operating officer.

Analysts believe that Associated British Foods is in a good position to grow its US business because it presently carries nearly US$1.2 billion (€1.2bn) on its balance sheet.

Some analysts have criticised the company for being too conservative in its acquisition efforts, despite spending $360 million earlier this year to acquire Mazola oils and other business lines from Unilever.

Currently the firm's Cereform division has some of the largest wholesale bakers in the US as customers.

Associated British Foods and subsidiary Abitec began US operations in 1995 with the acquisition of St. Louis bakery-products firm Roland.

In a quest for a larger plant, the firm earlier this year acquired Denver-based food supplier Rustco Products, moved into the north Denver facility and started business under the Cereform name.

The Denver plant employs about 125 workers, including a dozen staffers whose chief task is to dream up new concepts and bakery products for bakery producers.

"We provide the ingredients and mixes,"​ Simmonds said. "Our mission is only to supply the people who make the finished products, not to make them ourselves. We don't want to be both a supplier and a competitor to our customers."​