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 |