NAPI to close flour mill south of Farmington

James Fenton The Daily Times
The Daily Times

FARMINGTON — Navajo Agricultural Products Industry officials announced Wednesday that the company will shut down its Navajo Pride flour mill today.

The closure will last a year and affect 26 mill employees.

Of the 26 employees, some are being placed in other departments of the company, and some may be lost, according to Tsosie Lewis, chief executive officer for NAPI since 2002.

Some of the mill's top workers will be sent to college for additional training, he said. He declined to say how many will receive additional training.

"The key managers and operators, hopefully, we will send them to take grain and cereal science (courses) at Kansas State University," Lewis said in a phone interview on Wednesday. "We are paying for them to go. We just don't have a work force at times to recruit from, so we have to send them to school so they can learn and then bring them back. So they can take courses in milling for three or four months. When we start reconstruction, they will be transferred back to the mill."

Lewis expects a new mill facility to be operational by this time next year, he said.

Lewis also said the agribusiness entity plans to sell off antiquated milling equipment and replace it with updated computerized machines.

"Basically, we would not touch any of the building structure, not the electrical or the soundness of the building itself," Lewis said. "What we would do is remove all the old machinery and replace (it) with modern milling machines."

The state-of-the-art milling equipment would reduce the number of machines at the mill from around 15 to five and increase production, Lewis said.

Some of the milling machines are 30 to 40 years old, and some are old enough that replacement parts are no longer available. When a part breaks on a machine, NAPI workers often have to fabricate a replacement part, he said.

"We would only need to bring in five machines that would provide higher output and volume," he said. "The particular machines (in the mill currently) don't have any smart technology or sensors "that can tell us if (a particular machine) is heating up or is out of whack. The savings will come with having the most efficient milling equipment (in the new mill next year)."

Aside from upgrading the facility, Lewis said the closure was prompted by increased expenses and falling sales.

"Expenses kept adding up, outweighing revenue, which was reflected in part (in) the financial statement that came in on March 31," Lewis said.

Earlier this month, The Daily Times reported that NAPI issued a voluntary recall for its bleached, all-purpose flour because of possible salmonella contamination, which further impacted the mill's viability in its current condition.

Lewis said the product recall cost the company about $33,000 in lost revenue, and transportation and logistical costs.

An inspection by NAPI quality control personnel on April 22 failed to turn up any conclusive evidence of a contamination of salmonella, Lewis said.

"We had an inspection last Wednesday, but they couldn't find anything or conclusively (locate) a point of reference where the salmonella may have started," Lewis said. "We couldn't pinpoint anything. The recall was voluntary, but we thought it was a must."

Lewis said all the recalled flour — in 5-pound cloth bags, 25-pound cloth bags and 50-pound paper bags marked with lot No. 075B110064 and stamped with an expiration date of March 16, 2016 — was destroyed.

Despite the yearlong shutdown, Lewis said the company will still produce and sell flour, but he declined to say how.

"Right now, we're raising 10,000 acres red hard wheat. We're going to continue," Lewis said. "The mill's going to shut down, but that doesn't mean we won't still sell flour."

Prices likely will not rise as a result of upgrades at the mill, he said.

"No, probably not. We still have to stay competitive. We're not going to price ourselves out of the market," he said. "It's business as usual."

Albert Damon, executive director for the Navajo Nation Division of Economic Development, said the decision to shut the mill down was news to him. Damon said the shutdown was entirely up to the company and its board of directors.

"They're autonomous," Damon said. "We own them, but that's their decision."

NAPI, an agribusiness entity owned by the Navajo Nation, farms table stock potatoes, alfalfa hay and wheat among other crops on 78,000 of the entity's 110,640 total acres of land seven miles south of Farmington.

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621 and Follow him @fentondt on Twitter.