Nestibo Agra Commodity Processors Inc.
Nestibo Agra Inc. was established in 1996 by 12 local producers with more than 30 years of sunflower production experience in Deloraine, Man. Deloraine is located in a prime sunflower growing area, and a sunflower processing facility was just a natural development for the local farmers. The location also offers access to three major railway-shipping lines and many competitive trucking companies, giving the company direct access to the domestic, the U.S., and international markets.
The Canadian Business Journal spoke with Mike Durand, Sales and Purchasing Manager at Nestibo Agra, about the company beginnings in its unique business niche, and the current developments for the company on the sunflower and bakery ingredients markets. “As to our beginnings, Nestibo Agra was started by 12 farmers in the area, who were all growing sunflower. Deloraine, Man., is an area where a lot of sunflowers grow, so it seemed an ideal spot for a sunflower processing plant. The basic idea behind launching Nestibo Agra was that these farmers thought that they could make more profit by processing their own sunflowers.
“We started off marketing ourselves as a sunflower processor. We were a sunflower buyer and processor of sunflower seeds. That strategy worked well as our original market was exporting of the confectionary sunflowers,” says Durand.
Nestibo Agra customers continue to receive the best quality products. The company tests products prior to receiving them from farmers, and again prior to shipping them to customers. The company’s quality assurance program ensures that these procedures are followed at every instance. Nestibo Agra became the first sunflower processor in Canada to receive Hazard Analysis Critical Control Point (HACCP) certification from the Canadian Grain Commission under the Canadian Food Inspection Agency’s (CFIA) Food Safety Enhancement Program (FSEP). Through such thorough measures Nestibo Agra’s quality is second to none.
“A sunflower processor is completely different from other companies. The majority of manufacturers take in many different parts and pieces and create one product. We take in sunflowers and we make different things from them. This makes us a bit different and unique compared to 99 per cent of producers out there,” says Durand.
Sunflower seeds come in many shapes and sizes. Nestibo Agra sorts and sizes the crop, ships these sunflower seeds into different markets. “The very large seeds – the jumbo size – are sold into the snack food market. The slightly smaller size – the large size – may still go into the snack food market but also the pet and rodent feed market. The medium size seeds are hulled and can again fit into snack food industry or into the bakery market. The very small seeds are put into the bird feed market.
“The interesting fact about this is that if you as a business, miss out on one market component of this segmenting process, you could technically be creating and stockpiling one specific product that would not ship. One market is not enough, you have to have a market for everything that you produce. This is one of our challenges – to be present in all these markets continuously and without product shortages. Over the years and with lots of effort, we have been able to consistently supply these segmented markets which makes Nestibo Agra a significant player in the industry” says Durand.
The company clientele spans across various industries and right around the world. Durand mentioned that the Middle East used to be one of the main customers and importer of the company’s jumbo and large seeds. “It was the Middle East by far that had really set us up. They are our biggest export market and really built our company, but this market has dried up over the past three to four years,” says Durand. According to Durand, Argentina and China entered into this global market place and started producing cheaper sunflower seeds, and took over the market. “These countries also have a comparative geographical advantage and are closer to export ports than we are. It takes a lot more time for our product to get to Jebel Ali and Dubai compared to Argentinian product,” says Durand.
Once these markets became unprofitable, the company realigned its business and changed its focus to North America, expanding beyond sunflower processing, and becoming a snack food, a bakery ingredient, and a bird food supplier. “The bakery market is what is really getting us going right now, with the bakery kernel demand keeping our plants busy. A busy plant employing 14 people is very important for a small town in Manitoba.”
The company diversification came with the new focus on supplying the North American markets, offering customers as much variety as they may require. “We found that when selling our kernel to the bakery market, our customers asked to purchase all types of other ingredients. So we decided to trade the other commodities as well. That is really what the bakery market is all about. We supply a lot of smaller bakeries and they will take a load of what we have and it won’t necessarily be just sunflowers. Sometimes we have to trade other commodities just to get the sunflowers moving. It is part of the service for the client,” concluded Durand.