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New Minn-Dak chief gets back to his roots
By Mikkel Pates, Agweek Staff Writer
April 9, 2001
 
WAHPETON, N.D. -- A lot has changed since David H. Roche took the helm at Minn-Dak Farmers Cooperative March 2.

"We're in the midst of the lowest prices for our primary product, sugar, in the last 20 years," Roche says. "I'd say we're at a crossroads in terms of what the future holds. We'd like some assistance in creating a level playing field for international sugar trade."

If experience counts for anything, Roche should be well equipped to handle through rough seas.

Steeped in sugar

Roche, who turned 54 March 5, has been aware of the beet business since childhood. His father, David C. Roche, had been a member of the board of directors for Michigan Sugar Co. in Saginaw, Mich., and was its vice president of sales. A typical fall Sunday in Roche's childhood meant watching a Detroit Lions football game and then driving to the local beet factory in Carrollton, Mich., to watch single-axle beet trucks being unloaded.

"I grew up knowing about cossettes, wet hoppers and diffusers -- well, before there were diffusers there were diffusion cells," Roche says. "I was familiar with the industry, but was on a mission to get out of Saginaw."

Young Roche would go into public accounting. After earning his MBA at Michigan State University, he spent five years with a Big Eight accounting firm in Detroit.

His father died in December 1975.

"At the funeral, I saw the president of Michigan Sugar Co., whom I'd known. He said he was looking for a controller. I was in public accounting and had my resume out. I interviewed with the treasurer, who was retiring," Roche says.

In April 1976, Roche became controller for Michigan Sugar, which was listed on the American Stock Exchange. "My father never would have guessed I would go into the sugar business. My mother thought it was great because I'd been living in Detroit and it meant moving back to the hometown."

Sugar career

Roche would rise through the ranks at Michigan Sugar -- 1980, vice president of administration; 1986, executive vice president; 1990, chief operating officer.

In 1985, Michigan Sugar was acquired by Savannah (Ga.) Foods and Industries, a company with $1 billion in revenues.

"Savannah allowed Michigan to operate very autonomously," Roche recalls. "Their chairman had a saying, 'If it ain't broke, don't fix it.'"

In 1996, Roche was promoted to senior vice president of Savannah Foods and moved to Savannah. Besides keeping his post as president of Michigan Sugar, he also took on the title of president of Savannah Foods Industrial, a unit responsible for all manufacturing facilities (three cane refineries and four beet factories, at the time) and all industrial sales, or sales to industrial accounts that used sugar as an ingredient.

In December 1997, Savannah was bought out by Imperial Sugar Co. of Sugar Land, Texas. Roche became a managing director and senior vice president for the new Imperial, which had annual revenues of $2 billion. He was responsible for human resources, information systems and other issues related to the integration of two large companies.

"I think we had a fair amount of success on a lot of those fronts, but it didn't come easy. People are adverse to change," Roche says.

Besides trying to merge, the companies were coping with 25-year lows in sugar prices and uncertain trade and farm policy. In the past two years, Imperial closed Diamond Crystal food facilities in Moore, Okla., Boston and beet factories Tracy and Woodland, Calif.

"From an HR (human resources) standpoint, and administrative standpoint, dealing with those things is not fun at all," he says.

Roche resigned in mid-October 2000. Imperial filed for Chapter 11 reorganization Jan 16, 2001.

New chapter

Roche threw his hat in the ring when he heard of the Minn-Dak opening.

"Up to that point, my only contact with Minn-Dak was in visiting with their senior executives at industry gatherings," Roche says.

He visited the Red River Valley for the first time Jan. 3. Jan. 26, Minn-Dak announced Roche's hiring as the company's third president, succeeding Larry Steward.

Roche says coming to Minn-Dak seems like going back to his roots. In terms of size, Michigan Sugar produced about

6 million hundredweights of sugar when Roche ran it -- about the same as Minn-Dak. Michigan had four smaller factories, while Minn-Dak has one. Michigan had a grower base of nearly 1,400 growers, compared with 500 at Minn-Dak. Roche also was near the top of Imperial, which had $2 billion in revenues compared with Minn-Dak's $175 million.

"It is smaller in size but has more equilibrium," Roche says.

After a month on the job, Roche speaks glowingly of Minn-Dak's "quiet competence" and attention to carrying out its business plan. He describes himself as people person who sees value in consensus and delegation.

"I view management as a team sport," he says. "My feeling is that if you have a lot of talented people the company pays, you'd like to utilize them as much as possible."

Quicker 'PIK'er

Roche says a new sugar-friendly farm program, Mexico imports and sugar trade leakage are the biggest, long-term issues facing the U.S. sugar industry. In the short-term, Roche is interested in "nurturing a preplant PIK program" for beet growers.

Last summer, farmers plowed 102,000 acres of beets in the PIK program. USDA gave 275,000 tons of sugar to farmers in return. Last September, sugar mills and processors forfeited 804,000 tons of sugar that had been collateral for government loans.

Luther Markwart, executive vice president of the American Sugarbeet Growers Association, in March told an audience of beet growers in Fargo, N.D., that they shouldn't expect a PIK program to be in place until late June or early July.

"I'm not sure whether Luther read the intensity of interest among his members," Roche says with a smile. "Luther is working very hard on that (earlier PIK program). He may not believe that, but Luther is working very hard on that."

An earlier PIK would help reduce the pile of Commodity Credit Corp.-owned sugar and save the government what Roche has heard is a sugar storage bill of nearly $1.4 million a month.

"It seems silly to waste the money in energy and resources (to plant the crop) and they destroy it," Roche says. "Why not avoid all of that before the inputs go in?"

USDA general counsel experts earlier didn't think an early PIK is supported by "underlying, enabling legislation."

"We in the industry think it is, and there's a number of congressmen and senators that share our view," Roche says, adding that a number of administrative appointees are not in place at USDA