Still Going Strong Heikki Pirilä – 30 years in starch processingAuthor Martin Brink
Making it in the starch processing business requires a keen eye for raw material quality and the ability to get the most out of your raw materials. A general rule of thumb is: the more refined the product, the more valuable it becomes. The investment payback time on a starch processing plant investment is rather long, so patience and a big wallet come in handy. The strong and growing demand for especially modified starches and valuable by-products is nevertheless enough to keep long-term investors keen. The reason is that starch and starch by-products are omnipresent; they are everywhere you look, that is as long as you know what you are looking at.
Heikki Pirilä has an eye for starch and starch by-products. He has been in the starch processing business for the better part of three decades, so there is not much that surprises him anymore. He started in the business as a design engineer back in 1984 and has been involved in all project phases of starch processing from design, project management, supervision and procurement to maintenance.
His work has seen him travel widely especially in Eastern Europe and Asia. His expertise is not limited to successfully setting up wheat starch processing plants; throughout the years he has gained valuable knowledge of raw materials sourcing regions, cultures and local energy sources, particularly in Russia and China where he has worked extensively.
Developments and future trends
Surprisingly little has changed over the years with regards to how wheat starch is processed. Development efforts have rather been focused on improving devices and the efficiency of the process as well as the further processing of starch.
“We have, for example, invented inline flour/water mixing, which means that there is no dough preparation and no delay before three-phase fractioning. We have also come up with our own maturing drum and agglomerator to ensure holding times that are optimal and even. The system is nearly fully closed, which means that we use less fresh water and therefore also produce less waste water. Due the relatively long payback period it is important to find ways to reduce the investment and production costs and make the whole process more efficient”, explains Heikki.
Native starch production is in itself not that attractive and the goal of most producers is in fact to enhance the production of highly valued products such as gluten and other products made of starch as well as by-products.
“I don’t really see native starch production as holding much promise, but there is a definite trend in further processing of starch into modified starches, syrups and sweeteners, organic acids, bioplastics, and biofuels and so on. When you look at the revenue structure the reason is very clear. Starch fetches about €400–450 per tonne and gluten up to €2,000 per tonne. It’s not rocket science to figure out where the real money can be made”, Heikki continues.
“Another noticeable trend is that we are not seeing much in the line of greenfield investments in Western Europe and for existing plants there is usually resistance to make significant process changes. Most investments are related to the renewal of machines and reducing the environmental impacts of production. Eastern Europe, Russia and Asia are definitely where it is happening with regards new investments in wheat starch processing”.
Starch processing is a challenging business
Wheat starch processing is known as being rather complex in itself and the investments required can hinder market entrants. Greenfield plants typically require a 5–7 year payback period.
“One of my clients once said that starch processing is second in complexity only to nuclear power generation”, says Heikki with a smile.
Investors commonly have to consider the energy dependence of their processes and energy prices. It can, however, be difficult to predict the availability and pricing of energy, especially in the long-term. A process that uses vast amounts of energy is sustainable as long as energy prices remain fairly low. There is a case to be made for investing in reducing energy dependence.
“Look for example what is happening in the Ukraine right now. Their energy prices have doubled in the space of a few days and it seems more pain is on the way. Imagine what that increase does to your bottom line.”
Raw material quality commonly changes from year to year and regionally. Early germination can, for example have a profound impact on the Falling Number, an indicator of the degree of germination and starch breakdown.
A further difficulty faced by producers is choosing their equipment and devices.
“There is great variance in the price and quality of devices. Due to the long payback period there is an ever present temptation to expedite the payback period by reducing device procurement costs. Facilities can run up to 30 years or even more if maintained properly, but inferior quality devices will usually fail no matter how well they are maintained. It is a fine balance that needs to be struck between the short-term financing needs and life-time costs. In most cases it is a good idea to consult with an independent consultant to find the optimal solution”, says Heikki.
Staying on top
So what does it take to be successful in this business area?
“It probably sounds like I am stating the obvious, but a crucial element is the ability to make maximum use of your raw materials and to run the process as optimally as possible. Producers that can efficiently produce the highest quality A-starch, gluten and valuable by-products and seamlessly deliver them to the market will always have a competitive edge. Efficiency gains can also be achieved by reducing energy and fresh water consumption”, Heikki eludes.
Proximity to the source of raw materials and good knowledge of local and regional conditions, cultures and infrastructure are also very important factors. Keeping a watch on market developments and predicting which products will do well in future are further key success factors.
“This is not an easy business, but we do know that the demand for starch and starch by-products remains strong and is increasing. The customers are out there and they will be there for the foreseeable future. Is my job to help my customers to be successful and put my 30 years’ experience at their disposal”, Heikki concludes.
Basic facts about starch and gluten
Where does starch come from?
Starch is a storable energy source found in all green plants. It is commonly found in potatoes, maize, wheat, rye, sorghum, barely, triticale, peas, rice and tapioca
Where and what is it used for?
Industries: Food Industry, Paper and Cardboard Industry, Textiles, Chemicals, Pharmaceuticals
Food Industry: beverages, sweets, chocolates, baking products, biscuits, desserts, canned fruit, food thickeners and stabilizers.
What by-products are produced?
Biotech products: citric acid, glutamate, lactic acid, syrup, lysine
Biofuels: biogas, bioethanol, biobutanol
Feed: for cattle, pigs and poultry in dry and/or slurry form
What is gluten and where is it used?
Gluten is a very valuable product of wheat starch processing. Gluten is a key ingredient in bread products. It makes dough elastic and helps the bread to rise and keep its shape. It also provides the chewy texture associated with doughnuts and bread. Gluten is also used in cosmetics, hair products and dermatological products.
The original text was published in our 1/2014 Top Engineer magazine
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