Central Soya Company (1934 - ): Work with Soy
A Special Exhibit - The History of Soy Pioneers Around the World - Unpublished Manuscript
by William Shurtleff and Akiko Aoyagi
©Copyright 2004 Soyfoods Center, Lafayette, California
The third of today's major US soybean crushers to enter the field, Central Soya was a leader during the 1930s in the development of solvent extraction, soy protein-based feed concentrates, and mixed feeds, and, during the 1960s and 1970s, in the development of soy protein isolates and concentrates.
Central Soya is the only major American soybean crusher to have the term "Soy" or "Soya" in its name and (as of early 1985) to be a division of a larger company (Shamrock Capital/Shamrock Holdings). Perhaps more important, Central Soya is unique in having an abiding interest in its own history and in having published a number of carefully researched and well written works on this subject (McMillen 1967, Central Soya 1981, 1984a), upon which we have drawn heavily.
The Early Years to 1939. The story of Central Soya up until the 1950s is largely the story of one man, Dale W. McMillen, called "Mr. Mac" by all who knew him. More largely, it is the story of his family, for his two sons ran the business after he retired in 1953. McMillen was born on 27 January 1880 in a large, well furnished log cabin near Van Wert, Ohio. Aspiring to be a lawyer, he attended Oberlin College. But in 1901, at the end of his sophomore year, his father's serious (though temporary) illness forced him to drop out to run the family's thriving grain elevator business. Becoming a partner with his father, he soon proved himself to be a born salesman and trader.
But in 1916, at age 36, Dale McMillen left this secure position to go into business on his own. With $2,000 down, he purchased a small grain elevator in Fort Wayne, Indiana, for $10,000 and founded the McMillen company to manufacture quality livestock feeds, named Wayne Feeds. McMillen agreed with the experts at agricultural colleges who, at that time, claimed that most feeds made by commercial manufacturers were not economical for farmers to buy. So McMillen started to promote a new type of feed, called concentrates or supplements, which provided about 30% rather than 100% of the total ration. These concentrates contained protein, vitamins, and minerals designed to be mixed with grains that farmers could grow themselves. The result was a more economical, yet nutritionally complete ration. However the concept was unpopular among most feed manufacturers because it meant reducing the tonnage of feeds they could sell. Much of Central Soya's early success resulted from the success of the concept of feeding concentrates. McMillen became one of the pioneers in the concentrate feed business and by 1929 his 13-year-old company was worth $3 million (H.W. McMillen 1967; Central Soya 1984a).
While developing his feed business, McMillen had become very interested in soybeans, then a relatively new crop, whose potential had been established primarily as a forage or hay crop and as a soil conditioner. By the late 1920s there was a growing interest in using the soybean's seeds to produce oil and meal, but only a handful of companies had been successful at commercial soybean crushing. The best known of these was the A.E. Staley Manufacturing Company, which started in 1922. McMillen undertook the challenge of developing what he saw as the soybean's greater potential. Above all he believed that soybean meal could become an important ingredient in livestock and poultry feeds.
The American Milling Company was then (starting when??) pioneering in soybean crushing, and before the end of 1929 McMillen had merged his company with American Milling Co. to form Allied Mills; he served as its first president. In about 1931 McMillen played a key role in founding Soya Products, an early and innovative soybean marketing organization (Cavanagh 1959). Although Allied Mills did well, McMillen, an independent man who liked to make his own decisions, eventually began to feel restricted by the big, new company; he left after about 2 years, to strike out on his own once again.
In 1933 America was in the midst of the Great Depression. McMillen, now almost 54 years old, was financially secure and had a successful business career behind him. At an age when most people are thinking seriously about retiring, McMillen decided to start a new company in a new field. In Decatur, Indiana, he bought an old, abandoned sugar mill named Central Sugar. He drove out the sparrows, put the men back to work, and began processing sugar from sugar beets. It was within the walls of that old sugar company that Central Soya Company was born. McMillen realized that by adding a soybean crushing plant to the sugar beet processing facilities he would have three important ingredients for livestock feed: protein-rich soybean meal, high-calorie molasses, and beet pulp. The oil could be used in a variety of food and industrial products (McMillen 1967; Central Soya 1984a). So on 2 October 1934 McMillen founded and incorporated Central Soya Company in Decatur, Indiana, with an initial capitalization of $125,000. He merged his first love, livestock feeds, with his latest one, soybeans. Yet in doing so he boldly staked his business future on a largely unknown crop of unproven potential. McMillen always had a burning desire to make new things happen and he nurtured an enthusiasm shared by few others for the soybean and for concentrated soy-protein-based feeds.
McMillen Feed Mills was organized a month later as a division of the new company to produce Master Mix concentrate feeds, based on McMillen's continuing belief that soybean meal could be the key protein ingredient in animal feeds. Central Sugar Company continued as a separate corporation. Soon two new buildings were built for Central Soya's expeller soybean processing next to the sugar beet processing plant; part of the space on one floor was devoted to the batch mixing of Master Mix feeds. Central Soya began soybean crushing in late 1934 and shipped its first load of soy oil on 8 December 1934 (Weller 1970).
Master Mix concentrates were sold through a network of dealers. Through special financing programs Central Soya helped these dealers to establish facilities for mixing the Master Mix concentrates locally grown grains to make complete rations. The investment soon paid off as farmer-customers responded to the new, economical feed services offered by Master Mix dealer-mixers. In the spring of 1935 McMillen set up Central Soya's corporate headquarters and general offices in Fort Wayne, Indiana, about 20 miles northwest of Decatur. That same year the company added a complete feed program to its concentrate feed production. (What was the name of these Feeds?? McMillen Feeds??) In 1935 Central Soya and its McMillen Feed Mills Division had net sales of $1.25 million.
McMillen tackled the soybean processing portion of his business with similar foresight and vigor. The expeller method, first used by Central Soya for extracting oil from soybeans, was inefficient and gave inconsistent quality. So in August 1936 McMillen organized a technical department, headed by Norman Kruse (a former researcher for Procter & Gamble), to investigate better processes. While the solvent extraction process looked promising, the best equipment was designed for much larger capacity than Central Soya needed. In December 1936 McMillen sent Kruse and Harry Offutt, an Indiana building contractor, to Germany to investigate the solvent extraction processes and to select the best extractor for Central Soya. At that time there were only two solvent extraction plants in operation in the US. These were run by Archer Daniels Midland and by The Glidden Co. Both were German-made Hildebrandt extractors located in Chicago. Their capacities were 150 and 130 tons a day, respectively.
In January 1937 Kruse and Offutt made a transatlantic phone call to McMillen recommending that he buy the largest Hansa Muehle (paternoster or Bolmann-type) plant they had studied. This plant, which had a capacity of 275 tons a day, would double Central Soya's capacity. This was much more than the company had anticipated or was even prepared to handle. As usual, McMillen took the risk and gave the okay to "go ahead and buy the big one." This bold decision to buy what would be the biggest solvent extractor in the US came when the economy was still in bad shape, the solvent extraction process was new, and the future of soybeans was still regarded with skepticism by many (Brinegar and Swinehart 1959; H.W. McMillen 1967; Central Soya 1984).
Central Soya's new solvent extraction plant, a massive five-story structure, was the biggest soybean solvent plant in America and the first Hansa Muehle solvent plant in the US. In November 1937 it went into operation at Decatur, Indiana. For the grand opening, McMillen had special railroad cars run to Fort Wayne, Indiana, with delegations representing all branches of the industry, leaders in grain marketing, bankers, financiers, and university and government scientists, for an inspection trip and later a banquet and speaking program that filled the local auditorium (Dies 1942). However a host of problems arose. The German-made solvent extraction equipment was designed for processing Manchurian soybeans of the type Germany then imported, not the American variety with their higher oil content. The soybean meal produced in the process was off color, too dry, and retained a solvent odor. Animals simply disliked it. Central Soya's technical department went to work on these problems and, although it took 5 years to get the machine working properly, eventually solutions were found. An early advertisement for McMillen's expeller-made feeds is found in the 1936 Proceedings of the American Soybean Association. The product was called Master Soy: Mineralized Soy Bean Oil Meal. (Why not Master Mix?? Was the name changed later or were they two different products??) The ad contained two long quotes from a University of Illinois Agricultural Experiment Station Circular titled "Utilizing the Soybean Crop in Livestock Feeding" (Rusk et al. 1931) stating that soybean meal was "an excellent protein supplement" for all classes of livestock and poultry but that adding minerals, scientifically, improved its feeding value. A 1939 ad in the same publication announced Expeller 41% and New Process Toasted 44% Soybean Oil Meal. The percentages referred to the protein content and "New Process" meant "solvent extracted." The ad also noted that by the end of summer, 1939, the Decatur plant would have a processing capacity of 7.5 million bushels (204,000 metric tons) and storage of 2.5 million bushels (68,000 metric tons) a year. A new expeller plant with 1 million bushels (27,216 metric tons) storage capacity would be ready for operation in the fall at Gibson City, Illinois.
In the late 1930s, soybean meal still had very little standing in the feed industry. Many farmers believed (incorrectly) that feeds containing what is now considered the correct amount of protein would create "toxemia" (poisoning) in livestock. When was trichlor poisoning?? But McMillen believed that the soybean was the best source of protein in livestock feeds, an idea he worked long and hard to get accepted-- against great odds. Through cooperative work with agricultural colleges, utilizing nutrition conferences for veterinarians (Central Soya 1938) and livestock feeders, he and his staff helped to dispel false ideas about soybean meal and to give it the place it deserved in feeds. His personal salesmanship and his continuing emphasis on improving his products by incorporating the latest technical advances in processing techniques also contributed significantly in building a market for soybean meal and thus for the soybean itself (Soybean Digest 1966).
Most early American soybean crushers saw the oil and their main product and the meal as a by-product. Central Soya looked at things in just the opposite way. Until the early 1960s it sold all of its crude soy oil to who??
Central Soya began production and distribution of commercial lecithins in 1939?? (50 year brochure says 1940s??) Where get them?? The early development work was done by E.B. Oberg??, freshly arrived from The Glidden Co.
The 1940s. During the 1940s McMillen continued to move his company and himself at a whirlwind pace. In 1939-40 Central Soya opened its second soybean crushing facility at Gibson City, Illinois. In 1944 it acquired another similar facility at Marion, Ohio. Grain elevators were built and new feed mills established. The company concentrated on geographical expansion of its basic operations: crushing soybeans, marketing soybean meal and oil, and manufacturing and selling Master Mix livestock feeds. Its headquarters in Fort Wayne were at 300 Old First Bank Building. Central Soya's net sales, only $1.2 million in 1935, topped $10 million in 1940 and $100 million in 1948, a roaring 83-fold increase in only 13 years! (Brinegar and Swinehart). In 1940 the company was advertising its 44% soybean oil meal under the Central Star brand. In 1941 Central Soya patented a new solvent extraction process especially designed for American soybeans. (Patent number?? Key features??) It became the basis for development of a soybean meal with significantly improved color, flavor, and nutritional value. This high-quality meal represented an important research breakthrough and it established the Company as a leader in the soybean crushing and feed industries.
In 1942 McMillen established a Central Research Laboratory (probably not a "biological laboratory" as one (source?? says) at Decatur, Indiana. This small research lab, located in one corner of the sugar beet factory, was initially staffed by 5-6 people who did largely empirical research. Some of its first work, prompted by wartime shortages of meat and milk, was to develop new uses for protein-rich soybean meal. E.B. Oberg (who was at Central Soya from 1939-43) did early work on enzyme-modified soy whipping proteins (Soy Whip??) and on bleaching and modification of lecithin with enzymes (such as proteolytic papain) to make it more fluid for use in sausage coatings. During 1942-44 A.W. Schneider did research on trying to isolate soy proteins for use in industrial adhesives to replace casein. The resulting product, which had no name, was partially commercialized by the Champion Paper Co. In the following years it made a number of important advances in both animal and human nutrition, and showed that the potential of the soybean had only begun to be tapped. In the early 1940s (what year??) Central Soya introduced its first soyfoods, defatted soy flours and grits for both food and industrial uses, and was soon a major?? producer. The company's defatted soy grits were called Me-T-Soy, the regular (defatted??) soy flour was Melksoy, and the fine-grind soy flour was Soyafluff (wasn't that Glidden's??). A full-fat soy flour, made from dehulled soybeans (name??) was used in sausages (by the Eckridge Sausage Co. in Fort Wayne) and in the K-ration (Oberg 1985; Schneider 1985, personal communications). In 1946 Soybean Digest, in an article on "The Research Program of Central Soya," reported that Ralph C. Holder was directing head of the biological laboratory and Dr. J.K. Gunther was directing head of research. In the laboratory four groups of chemists and technicians each specialized on a different aspect of the soybean: oils and fats, bakery research focusing on soy flour and lecithin, industrial uses of soy flour (as in adhesives and insecticide spreaders), and protein research on isolated soy proteins. The research on soybean nutrition fell into three categories: the use of soybean meal in feeds, processing variables that create the most nutritious soybean mean, and soy proteins in human nutrition. The technical department of Central Soya consisted of three groups: the pilot plant laboratory, the pilot plant, and the plant technicians. The pilot plant group was studying oil refining, lecithin production, flour for special applications, extraction of by-products, purification of protein, heat treatment of meal, and soy flour debittering processes.
While much of the research on soyfoods looked very promising during and immediately after the war, interest had waned sharply by the late 1940s and the future did not look bright. McMillen felt that the volume was too small and there was too little profit to support a major research effort. Moreover, he feared that there would be a Depression in the postwar years as there had been after World War I. So he decided to shut down the biological laboratory and terminate its entire research staff. In early 1949 (probably not on 1 January 1950 as one source (who??) said) the laboratory doors were locked. (Ask Ken Gunther for details?? Get annual reports??) However at the McMillen Feed Research Headquarters in Decatur, research on animal feeds kept a large staff busy (Brinegar and Swinehart 1959).
One of the most successful products to come out of Central Soya's short-lived research laboratories was lecithin. The company began to sell lecithin in 194?? By about 1943, largely on the basis of Oberg's work, they were refining?? (who refined it??) and selling 20 million lb (9,000 metric tons) a year under the name Central's Lecithin. Sales started slowly as Central Soya had to push its way into a market dominated by Glidden, ADM, and American Lecithin Co. For years Central Soya sold its lecithin through a broker, the Cleary Corp. in New Jersey (Oberg 1985, personal communication). Important, pioneering work was also done on soy proteins. In the late 1940s researchers had developed an improved process for a whipping agent made from hydrolyzed soy protein isolate. (Patent number??) Key researchers in this area were Lou Sair, Rathman, R.S. Burnett, J.K. Gunther, and J.R. Turner (Burnett 1951a). In 1948 Central Soya published a bulletin about its isolates titled "Central Soy Albumen for Confectioners." After the labs were closed, Gunther licensed?? the rights to make enzyme-modified isolates from Central Soya and in 1950?? started his own business, Gunther Products, as described in Chapter 68.4. Lou Sair went to Griffith laboratories and developed America's first commercial soy protein concentrates in 1959??
The 1950s. The years following World War II years brought rapid expansion of Central Soya's operations. By the early 1950s Central Soya was established as a strong, well-financed company with great growth possibilities. In 1950 the company had the capacity to process 20 million bushels of soybeans a year.
In May 1950 Central Soya's first desolventizer-toaster began operation at Decatur (Why important??) In 1952 company researchers patented (Patent number?? Who??) a new solvent extraction process that altered the cellular structure inside the soybean flake, making the protein more easily digestible and improving livestock feed conversion efficiency. The company published a pamphlet titled "It's New; A Miracle in Meal." This processing improvement further established Central Soya as a leader in soybean crushing technology, resulted in greater market share for feed operations, and led to a rapid expansion of facilities.
In 1956 Central Soya produced America's first?? (No!?? ADM was first in 1949; CD Dec '59 p.3,7) dehulled soybean meal, brand-named Miracle Meal. Generically it was called 50% soybean meal but later (when??) called 49%. This greatly expanded the feeding of soybean meal to poultry, since they did not do well on 44% hull-containing meal. (Isn't this the same as the 1952 breakthrough?? Meyer first guessed the date as 1950??). The company did extensive research on feed use of the resulting soybean hulls and by the late 1950s (when??) had introduced Soybran Flakes which were specially processed for high digestibility (Chemurgic Digest, July 1959).
In 1953 McMillen decided to officially retire. His son, Harold W. "Mick" McMillen, became chairman of the board and a year later his other son, Dale, Jr., became president. Although his retirement proved to be more nominal than actual, it gave a pause for evaluation. Dale McMillen had built his company on three basic concepts: The importance of competent people, the potential of concentrates in livestock and poultry feeding, and the soybean as the best source of protein in livestock feeds. McMillen was a colorful figure, endowed with the skill to inspire. He was a strong and dominant man of strong opinions. Everyone in the company was on a first name basis and unusually strong bonds of friendship were formed among many employees. Visitors noted that employee morale was high and a spirit of teamwork prevailed. McMillen was a kind of homespun philosopher, always walking around with a cigar and giving advice, often in the form of mottoes, little sayings, or booklets containing these sayings. His lifelong motto was "This day, I will beat my record." It infused all that he did, eventually became his company's motto, and still was in 1984. His keen business sense was matched by a keen social conscience. He aspired to be esteemed by his fellow human beings by rendering himself worthy of their esteem. He set up a public foundation and played a prime role in the establishment of a local park, camp ground, library, and church. People in and out of his company spoke of him with great affection and respect (Brinegar and Swinehart 1959; H.W. McMillen 1967).
In 1954 Central Soya's annual net sales had grown to $150 million. It employed 2,000 people at facilities in Indiana, Illinois, Ohio, Tennessee, Pennsylvania, and Wisconsin; feed manufacture surpassed one million tons. In 1955 a grain merchandising section was established to buy and sell grain and soybeans and to purchase soybeans for crushing. At the same time, transportation systems were consolidated and upgraded. The company pioneered bulk shipment of feed by rail using its own covered hopper cars. In April 1955 McMillen bought and incorporated his own barge line and began transporting his grains by water.
In 1950 federal laws restricting sale of colored margarine had been repealed, greatly broadening the market for soy oil and fueling expansion of Central Soya's crushing facilities. In 1956 another soybean crushing plant and feed mill was built at Chattanooga, Tennessee, for further penetration of the southern markets. The need for still more plants was a major reason that Central Soya took a long look at the Glidden Company.
In 1958 Central Soya acquired the Chemurgy Division (formerly the Soya Products Division) of The Glidden Company under a 3-year lease with option to buy (which they did in 1961). The term "chemurgy" referred to the use of farm products by industry (see Chapter 66). Glidden, a pioneer in soybean processing and the development of further processed soy proteins and lecithins, had built one of America's first soybean solvent extraction plants in 1934 and the first US plant for the production of industrial grade soy protein isolate in 1937, then food-grade isolate in 1939 (see Chapter 68.2). The acquisition, which was very reasonably priced ($14-21 million??), gave Central Soya two large soybean crushing plants (in Chicago and Indianapolis, Indiana), 11 million bushels of additional soybean storage capacity (including a large elevator on the Calumet River in Chicago, well suited for exporting), and 523 new employees.
Even more important, Glidden had one of the best soy research laboratories in America: recall that Central Soya's lab had been disbanded in January 1950 and the company had done nothing with edible soy proteins since that time. Glidden's Ed Meyer became head of research in Chicago for Central Soya's new Chemurgy Division, Sidney J. Circle became ?? and Dale Johnson became sales manager for edible protein products, and Joe Rakosky became head of the microbiology lab?? Central Soya also acquired an expanded product line that included lecithin, soy flours, and the world's leading isolated soy proteins for both industrial and food use. Central Soya put these capabilities to work almost immediately to develop commercially viable edible soy protein isolates and concentrates. In fact, Central Soya was the first to commercialize these products as food ingredients.
On 2 October 1959 Central Soya celebrated its 25th birthday. The public relations department developed a program and brochure titled "Foodpower . . . USA," and to this day Central Soya refers to itself as "The Foodpower People." Feed Age ran a lengthy feature titled "Twenty-five Years of Foodpower" (Brinegar and Swinehart 1959). That year the soybean and feed divisions each had 40% of net sales, while grain merchandising took 20%. By this time Central Soya ranked 217th among US corporations in terms of annual sales, which were $285 million. It had 2,850 employees and ran seven feed manufacturing plants in the US with the capacity to produce more than 1 million tons of livestock feed, and process 100 million bushels (2.7 million metric tons) of soybeans a year. But those who marveled at Central Soya's growth during those first 25 years would be even more amazed at the expansion that was yet to come.
On 27 October 1959 Central Soya opened a landmark plant in Chicago (as part of the former Glidden complex) to produce its new Promine brands of "edible isolated soy protein," including Promine D. This completed a project that The Glidden Co. had started in the late 1950s, when Glidden became the first company in America to produce regular (non-enzyme-modified) food-grade isolated soy proteins. (Was this just Glidden's former industrial isolate plant, expanded??) At the gala ceremony at 1825 N. Laramie, with the memory of the USSR's recent launching of Sputnik (Oct. 1957) fresh in everyone's mind, Wheeler McMillen, leader of the American chemurgic movement (see Chapter 66) gave an inspiring speech titled "Launching a Protein Satellite." He predicted that "no metallic satellite in outer space will be able to match in terms of human happiness and well-being, the contribution of this, the protein satellite" Harold W. McMillen, Central Soya's chairman of the board, dedicated the plant to "the world's growing population, for whom protein provides the building blocks of good nutrition and health." A variety a products made from Promine, including a meatless "Hot Dog" were served (McMillen 1959, Soybean Digest 1959).
Central Soya took a major risk in building this plant, with a capacity of 5 million lb (2,267 metric tons) a year, before it had an sure buyers for the product. One of the first buyers was Mr. Oscar Viapanna (sp??) at Picot Laboratory in Mexico. He bought 40,000 lb of dried, isoelectric (pH 4.5) isolate for use in high-protein, nutritional foods. Other early uses included ?? Central soya later regretted using the name "isolated soy protein" because people always felt that it sounded like a chemical. Later (when??) they started to use the term "soy protein isolate (D. Johnson 1985; Joe Rakosky 1985, personal communications).
The 1960s. In 1960 Central Soya's common stock first began to be traded on the New York Stock Exchange under the ticker symbol CnSoya, later?? CSY. Does that mean they first went public or that they reached a significant size?? When did they first go public?? Also in 1960 the company introduced a unified corporate product identification system, based on a new symbol or logo, three plant-like arrows rising from a symbolic world (Soybean Digest 1963).
The 1960s began with a breakthrough in livestock feeding technology, as Central Soya (which had had a large IBM computer since the late 1950s) developed linear programming for computer formulation of feeds to get optimum nutritional value at least-cost. This was an industry first and set the stage for rapid geographic expansion. During the rest of the decade the company built or acquired feed plants in Texas, Indiana, Wisconsin, Iowa, Georgia, Kansas, Michigan, and the Carolinas (Central Soya 1984a).
The 1960s were, above all, a decade of internationalization for Central Soya, beginning with exportation of soybean meal and Master Mix animal feeds. Glidden's elevator in Chicago was a terminal for exports through the newly opened St. Lawrence Seaway. In 1961 the firm opened its first overseas sales office, in Rotterdam, the Netherlands, to manage export sales of soybean meal to European customers. In 1962 an export office was opened in Florida to expand Master Mix feed marketing in Latin America. The company's first feed manufacturing plant outside the US was opened at Catano, Puerto Rico in May 1964. A feed plant at Port-of-Spain, Trinidad, was acquired in 1965. International expansion continued throughout the decade with the addition of feed plants and marketing operations in Latin America (Guatemala), and Europe (Burbach and Flynn 1980; Central Soya 1981).
In 1961 Central Soya began its first refining of soy oils, for industrial use only. Prior to this time it had been doing what with all its crude soy oils??. During the 1960s Central Soya passed Archer Daniels Midland to become America's leading manufacturer of (soy) lecithin.
By the late 1950s dramatic changes toward consolidation and vertical integration were taking place in the poultry industry. Poultry feeds had been an important part of Central Soya's business since the 1930s. In 1962 the company acquired three broiler processing facilities in Georgia and Tennessee, and egg production facilities in Florida and Mississippi. A turkey processing plant was added in 1964, and another egg plant in South Carolina in 1967.
During the 1960s Central Soya was a leader in the development of edible soy protein isolates and concentrates; and their Promine line of isolates came to be considered the state of the art. During the early 1940s E.B. Oberg had done pioneering work on soy protein concentrates at Central Soya. This was continued there during the late 1940s by Lou Sair. They developed an isoelectric leach process and called the product Protein-70?? (because it contained 70% protein). From about 1953-54 Sid Circle at Glidden had done parallel but independent research on a concentrate made using a unique alcohol leach process, which gave an excellent flavor and required only simple equipment. After being terminated by Central Soya in 1950, Lou Sair went to work for Griffith Laboratories. In 1959 he launched America's first food-grade soy protein concentrates. Shortly thereafter, in December 1959, Central Soya built a large pilot plant at Glidden's former facility in Chicago to make soy protein concentrate on a commercial basis under the name Pro-70. The first big sales in the early 1960s were to Mead Johnson for use in their Metrecal wafer. Details of the production process were improved and in 1962 Central Soya built a full-scale soy concentrate plant in Gibson City, Illinois??, and renamed the product Promosoy. Selling for just over half the price of Promine, it found broad commercial application in food systems, including meat products (especially sausages??) and baby foods. By the mid-1960s Promosoy isolated soy proteins had become so successful that in 1966 the company built a plant with 30 million lb capacity (Where??). Central Soya also continued to make soy flour and grits (Soybean Digest, Nov. 1969; Ed Meyer, D. Johnson, personal communications).
To demonstrate one of the many applications of Promine, Jim Liggett began in 1963-64 to develop a non-dairy frozen dessert (soy ice cream) called Rich Freeze. Created initially primarily for sale in Japan, it was later widely demonstrated in the US and Europe (see Chapter 30).
New soybean crushing plants were also built or acquired during the 1960s: Bellevue, Ohio (1961); Belmond, Iowa (1964); and Delphos, Ohio (1966, formerly Soya Products Co.). These new facilities increased the company's crush capacity to more than 100 million bushels of soybeans annually by 1966.
In October 1966 Harold W. McMillen, son of the founder and then chairman of the board, presented a speech in Indianapolis titled "Mr. Mac and Central Soya: The Foodpower Story" before the Newcomen Society, a group interested in material and corporate history. The best early history of the company to date, it was published in 1967 as a 28-page booklet with nice line drawings. McMillen noted that the company had a net worth of $93 million and annual sales of $520 million. Also in 1967 Dale McMillen, then an active 86 years of age, was chosen an Honorary Life Member of the American Soybean Association.
In 1967 Central Soya entered the institutional foods business by purchasing a meat processing company (Which one?? When was it sold and why??) (Central Soya 1981).
The 1970s. In 1970?? Harold W. McMillen, the founder's oldest?? son, retired as chairman of the board. During his 17-year term in office he had helped guide Central Soya from a $100 million feed and soybean processing operation to a $1 billion international agribusiness and food processing company. He was succeeded by his brother Dale W. McMillen Jr.?? (who was chairman of the executive committee in 1980??) When did the last McMillen leave?? Dale McMillen Sr., the founder, died in 1978 at age 91.
The 1970s were a decade of diversification integrated with expansion of its soy oil refining and processing operations. Diversification was aimed at reducing company dependence on uncontrollable commodities, dampening erratic commodity price swings caused in part by volatile exchange rates, and giving the company more control over its bottom line. There was also a move to products with greater value added. Central Soya extended its food chain by moving into the foodservice and retail food businesses. It entered the institutional foods business in 1970 by acquiring Fred's Frozen Foods, Inc., which sold its meat fritters to Indiana restaurants. In 1978 it purchased Caribe Food Products, a small processor of Mexican foods.
In 1970 Central Soya opened its first edible vegetable oil refinery at the Decatur, Indiana, soybean processing plant. The refined oils were sold to food processors for use in margarines, salad dressings, and the like. A second edible oil refinery was opened in Chattanooga, Tennessee, in 1972. To further integrate its refined oil activities, in 1971 Central Soya built a packaged vegetable shortening plant at Decatur. Oils produced at the Decatur refinery were made into large cubes of shortening for use by food processors, foodservice customers, and bakeries.
In 1972 Central Soya entered the consumer (retail) food processing industry by acquiring J.H. Filbert, Inc., a privately-owned Baltimore-based company with annual sales of $63 million. Mrs. Filbert's brand private label margarines and salad dressings were marketed east of the Mississippi to grocery chains, food distributors, and food services. J.H. Filbert immediately became a heavy user of refined soy oils produced by Central Soya (Central Soya 1984a). By 1979 Central Soya ranked 33 in annual food sales among US corporations ($1.36 billion).
Internationalization activities continued during the 1970s, with most of the activity in Latin America and Europe. In Jamaica a feed mill was acquired in 1971, as a joint venture with 55% ownership). In Brazil, during 1970-74, four prepared feeds companies, a feed mill, and a cattle feed company were purchased. In 1977 a feed mill was obtained in Puerto Rico. In Europe the year 1972 brought significant growth in Central Soya's international feed operations with the acquisition of Bonda Industrial Corporation in Rotterdam. Since the early 1930s Bonda had been making and marketing livestock and poultry feeds in the Netherlands under the brand name Provimi (an acronym for protein, vitamins, and minerals). By 1972 Bonda, with sales of $103 million, was a complex international organization, which gave Central Soya new feed plants in seven countries and distribution in 19 more. Provimi became Central Soya's brand for sales in many areas outside the US (Burbach and Flynn 1980; Central Soya 1981, 1984).
Growth also continued in Central Soya's original feed business. The company acquired Pay Way Feed Mill, Inc. in Kansas City and bought additional feed manufacturing plants to increase market penetration in Iowa, Nebraska, Michigan, Missouri, Kansas, and Kentucky.
Also during the 1970s Central Soya became heavily involved in poultry and egg production and processing. The company was one of the leaders in shaping the modern poultry industry, which moved in the 1960s from America's backyards to large, vertically integrated animal factories. These led to a dramatic drop in the price of poultry and eggs. Soybean meal was used extensively in these poultry operations.
Key advances were made by feed researchers. In 1973 layer feeds based on amino acid levels rather than protein content were introduced. In 1977 the company developed the first-ever swine feed concentrates based on available amino acid content, a concept that soon became standard in the industry. During the 1970s Central Soya shifted its former emphasis on expanding crushing capacity to increasing crushing efficiency and product quality at existing soybean plants. In 1973 the company acquired its first soybean crushing facility outside the US, a plant located at Utrecht, the Netherlands.
In 1977 Central Soya entered the seed business by acquiring O's Gold Seed Company, a hybrid seed corn company in Parkersburg, Iowa.
Soy proteins made several important advances. By 1970 Central Soya was making Textrol, a textured soy flour. (Starting when?? What happened to it??) In 1974 they introduced PlusMeat, a meat extender based on textured soy flour, and in the mid-1970s stopped making full-fat soy flour. Then in 1975 Central Soya introduced the industry's first textured soy protein concentrate, brand-named Response. It represented a significant technological improvement over conventional textured soy flours, which it began to replace. In 1976 Central Soya acquired rights to produce and market steam texturized vegetable proteins under General Mills' patents. The purchase included steam texturizing technology and equipment, plus exclusive US rights to the Bontrae line of textured soy flour products. In 1979 the US Department of Defense approved the use of soy concentrates in the ground meat products used by the Armed Forces. Earlier that year, the corporation made the difficult decision to drop its soy isolate business. From 1958 until 1977?? when he retired Dr. Edwin W. Meyer, had been Director of Research for Central Soya's Chemurgy division. During this period he authored 31 articles and 38 patents related to soy products, mostly soy proteins.
Throughout the 1970s, Central Soya's Promine was the world's best-selling and most esteemed isolated soy protein. But, for various reasons, the product was only marginally profitable. The plant in Chicago was obsolete and in a bad location, with major expensive waste disposal problems. There was no room to expand the old plant, and to move it would have been too expensive. So in about 1978-79 Central Soya simply announced that it was discontinuing production of Promine soy protein isolates. When they went out, they literally handed the market over to Ralston Purina by suggesting to their customers that they buy from Purina. Prior to this time, isolates had been a minor, slightly unprofitable business for Purina. Now they became big business. In about 1980-81?? Archer Daniels Midland, after making a deal with the city of Chicago over waste disposal, finally bought Central Soya's once-famous isolate plant in Chicago. Central Soya took a pretax loss of $5.2 million on the deal (W. Williams 1981). Did Central get out of non-textured concentrates at Gibson City plant at the same time??
In 1978 Central Soya consolidated most of its food research operations in a new 24-acre, $9 million Research and Engineering facility north of Fort Wayne. There 60 scientists and technicians support the firm's Chemurgy Division, Refined Oil Division, and three food company subsidiaries. The facility housed state-of-the-art food, product development, microbiological, analytical, chemical, and sensory evaluation laboratories, as well as a complete process engineering plant. It marked a milestone in the company's diversification into the food industry.
The 1980s. During the early 1980s, under Chairman, President, and CEO Douglas G. Fleming, Central Soya took major steps toward long-range corporate redirection, attempting to restructure the company and reposition its of assets for stronger growth and improved profitability. There was movement away from Central Soya's "traditional concentration on basic commodities to more emphasis on value-added businesses." Aggressive expansion was planned into food processing. A new emphasis was placed on increasing the return on stockholder's investment. The company had a firm corporate policy of using future markets to hedge all soybean and grain transactions, thus minimizing the effects of commodity price fluctuations on profit margins and reducing the risk of ownership. But hedging did not guarantee satisfactory profit margins or return on invested capital. The weak US farm economy and strong US dollar (which seriously hurt exports) both hurt Central Soya's profits.
The 1980 annual report showed net sales of $1,744 million for the year (up from $1,194 in 1976) and net earnings of $34.8 million. It described the company as employing 10,500 people, operating 80 faciliteis in the US plus 20 plants outside the country, and having four business segments, each of which relied heavily on soybeans:
1. Commodity Operations (including soybean processing and grain merchandising): 34% of total sales
2. Feed and Farm Supplies (including Domestic Feed, Farm Supply, O's Gold Seed Company, and International Feed): 33% of sales
3. Food Products (including Butcher Boy Food Products, Fred's Frozen Foods, J.H. Filbert, Refined Oil, and Chemurgy): 19% of sales
4. Poultry Products: 14% of sales In September 1983 Central Soya sold its seed business and in February 1984 sold the last of its poultry operations, which were generating a relatively low return on investment. At the time of sale, the company was one of America's largest processors of broiler chickens (400 million lb a year, turkeys (50 million lb), and eggs (1,000 million). The 1984 annual report showed the company has having two basic groups, with seven divisions. These were supported by major research facilities in Decatur, Indiana (animal feeding and management), The Netherlands (animal feeding), and Fort Wayne (food related).
1. Agribusiness Group
Domestic Feed Division
International Feed Division
Soybean Processing Division
Grain Merchandising Division
2. Food Group
Refined Oil Division
Food Subsidiaries (Fred's Frozen Foods, J.H. Filbert, Butcher Boy Food Products, Zatarain's, Inc.)
During the 1980s Central began to reflect on its rich heritage. In mid-1981 the company published 17 "Fact Sheets" giving the most complete and detailed information (including history) about the company and each of its divisions, subsidiaries, and products. Then in 1984, in celebration of its fiftieth anniversary, it published a special lengthy history of the company under the theme "Fifty Years of Growth and a Future to Share." This was sent to stockholders with the annual report
In its 1984 annual report Central Soya described itself as:
. . .an international agribusiness and food processing company. Central Soya's people, products and processes halp farmers raise livestock more efficiently, develop new uses of soybeans and soybean products, and provide high quality and convenient food for consumption both at home and away. From farm to table, the Company is involved in virtually every part of the food production system.
On 31 August 1984 Central Soya, with headquarters in Fort Wayne, Indiana, reported that its net sales during fiscal year 1984 totaled $1,727.7 million (basically unchanged since 1980) with net earnings of $21.9 million (considerably below 1980). The company's products were marketed in more than 50 countries. 12,500 stockholders owned 14.5 million shares outstanding. The company operated 67 facilities in North America and 17 in other countries around the world, employing 6,000 people (down dramatically from 1980). The Domestic Feed Division, in July 1980, acquired The O.A. Cooper Co., a Nebraska-based regional feed manufacturer and marketer. This acquisition improved Central Soya's strength in the Great Plains states. In 1984 Central Soya acquired three companies to become the first major feed manufacturer to enter the premix feed business. A premix is a mixture of vitamins and minerals added at the 5% level or less by the growing number of large commercial livestock producers who buy locally available soybean meal and mix it with home-grown grains to make their own ready-to-use complete feeds. Thus big livestock producers were becoming feed manufacturers--a fact that could transform the feed industry. In 1984 Central Soya made and marketed over 600 Master Mix Feeds and Farmacy animal health products through a network of 3,100 dealers located in 38 states east of the Rocky Mountains and direct to large commercial farming operations. Feed manufacturing capacity at 30 plants was 2.5 million tons a year.
The International Feed Division, in mid-1980, opened or acquired four new feed manufacturng plants in Brazil, Portugal, and Canada, then acquired two more in Europe in October, from Aliments Protector of Belgium. But in late 1984 all Brazilian operations were sold. In 1984 Central Soya had 12 feed manufacturing plants outside the US with a capacity of about 1 million tons a year and employing 1,200 people, 99% of whom were local citizens. These feeds were sold under three brand names: Master Mix, Provimi, and Protector. The company also exported feed to more than 50 countries where it did not have feed mills. Soybeans were the main protein source in all Central Soya's feeds, worldwide.
In its 1980 annual report, Central Soya stated that it was America's fourth largest soybean processor. In early 1983 the Soybean Processing Division shut its plant at Belmond, Iowa, then in mid-1984, acquired Victory Soya Mills in Toronto, Canada, the country's largest soybean processing plant, built in the early 1940s and formerly owned by The Procter & Gamble Co. (Central Soya 1985). In 1984 the company operated seven soybean crushing plants in the US and one in Utrecht, The Netherlands. These had a combined capacity of 121 million tons [or is it bushels?? I think so. See 1981 FS-1 Fact Sheet. Error 1984 History p. 11] representing about 10% of America's total soybean crushing capacity and making Central Soya still?? the fourth largest US soybean crusher. Central Soya's Flow Coated and Central brands?? of soybean meal are available with 48% or 44% protein content. Eighty percent of the crude soy oil produced by Central Soya's crushing plants goes to one of the company's own facilities for further processing. Most of the soybean meal is used in the company's own livestock and poultry feeds, but some is sold to other feed manufacturers is the US and overseas. Soybran Flakes (soybean mill feed) are also used in feeds.
The Grain Merchandising Division, in 1984, operated 14 grain merchandising facilities (primarily storage elevators) in the US, purchased 100 million bushels of soybeans a year, and had grain storage capacity totaling 60 million bushels.
The Refined Oil Division, in 1982, developed an automated gas chromatography technique, called "fingerprinting," for identifying and controlling volatile off-flavor compounds, and used this in manufacturing its Protected Oils. (What does Protected mean?? Inert gas??) In 1984 Central Soya's three refineries (in Decatur IN, Chattanooga TN, and Bellevue OH) had a capacity to refine 750 million lb (340,000 metric tons) of edible vegetable oil (mostly soy oil) each year. These were marketed under the Centrasoy brand. A packaged shortening plant in Decatur made 50-pound cubes of Centrasoy brand shortenings. Approximately 5% of Central Soya's soy oil supply was sold to manufacturers of industrial products: paints, varnish, plastics, resins, printing inks, water proof cement, fabric coatings, and lubricants. The Refined Oil Division utilized about 80% of the crude soy oil produced by the company's soybean crushing plants.
The Food Subsidiaries Division, in May 1980, acquired Butcher Boy Foods Products, America's largest processor of Mexican food for institutional customers and the largest acquisition in Central Soya's history. Caribe Food Products had previously been merged in to Butcher Boy. In 1984 Butcher Boy was renamed Centre Brands, Inc. 19?? saw the successful launching of Mrs. Filbert's I Can't Believe It's Not Butter, a butter substitute. In May 1984 Central Soya acquired Zatarain's, Inc., a New-Orleans based company founded in 1889 and specializing in Creole cuisine. Thus expansion into selected segments of the retail foods business continued.
The Chemurgy Division, which specialized in edible soy protein products and lecithin, showed excellent sales growth in all major product lines during the early 1980s, led by Response textured soy protein concentrate and Centrolex granular lecithin. Response was used mostly in meat and poultry products found in supermarkets, school lunch programs, restaurants, and institutional feeding. The soy proteins were produced at the plant in Gibson City, Illinois. Soy flour and grits were marketed under the brand names Soyafluff, Soyabits, Soyalose, and Soyarich (Glidden brand names from the 1940s); soy protein concentrates under the Promosoy and Promocaf (calf milk replacer) brand names; heat extruded textured soy flours under the Centex brand name; steam texturized soy flour under the Bontrae brand name; and heat extruded soy protein concentrates under the Response brand name.
In the late 1970s Central Soya began extensive advertising of its Centrolex brand oil-free (acetone extracted) granular lecithin to the health and natural food trades. In 1981 it introduced Centrolex granular lecithin with dried fruits and nuts (see Chapter 46). Centrolex was sold mainly to the health foods market as a dietary supplement, but was also used as an emulsifier in food processing and by 1984 had found a promising market in the production of magnetic media where it was used as a coating on tapes and floppy discs. In 1984 six Central Soya plants produced more than 40 varieties of crude, modified, and refined lecithin, in liquid and granular form, sold under at least nine different brand names. The company retained its leadership role in the lecithin industry, and widened it after ADM stopped making granular lecithin in 1982. Dr. Bernard Szuhaj, head of lecithin operations, was a leading author of scientific articles on soy lecithin.
In January 1985 Donald P. Eckrich replaced Douglas Fleming as President and CEO of Central Soya. Why?? A director of Central Soya since 1982, Eckrich acquired substantial experience in the food industry and corporate management as President and Chief Operating Officer of Beatrice Foods during 1979-82. He soon faced a major challenge.
On 14 March 1985 Central Soya received an unsolicited conditional proposal from Shamrock Holdings Inc. to purchase the 89% of Central Soya Co. it did not already control for $23 a share. Shamrock, privately owned by the Roy E. Disney family (a relative of Walt Disney??) and based in Burbank, California, felt that the stock market was undervaluing Central Soya because of short term low profits (Charlier 1985). On April 1 Central Soya agreed to the attractive bid from Disney's Shamrock Capital, a limited partnership created by Shamrock Holdings to buy Central Soya, to pay about $303 million, or $24.25 for the remaining shares (Rowe 1985; Investor's Daily 1985). Following this merger with Shamrock, Central Soya will lose its individual identity and become simply one division in a larger company?? Since it is now privately owned, annual reports to stockholders will no longer be issued, and obtaining basic information about the company will be much more difficult??
In 1984, as Central Soya celebrated its fiftieth anniversary, CEO Douglas Fleming described the company as "poised to grow with two important industries--agribusiness and food." He clearly saw soybeans as continuing to be central to the company's future: "How will we share in meeting world food demand? We'll share by continuing to develop new ways of processing and using the soybean. This unique plant produces more usable protein than any other crop, and soy protein is a valuable dietary supplement." Time will tell whether or not the new ownership will pursue a similar vision.