Japanese Company Takes Hold of Chile Business

A large Japanese company has acquired a strategic stake in the emblematic New Mexico chile pepper business. On Thursday, May 12, Mizkan Americas announced it had purchased Deming’s Border Foods from Ares Capital for an undisclosed amount.

Located in the southern border county of Luna, Border Foods has long proclaimed itself as the largest processor of green chile in the nation if not the world.

Border Foods packs numerous chile products and makes enchilada sauces and salsas for both private and brand-name labels.

Craig Smith, president of Mizkan Euroamericas, cited the growing Hispanic foods market as a big reason for his firm’s buy-out of Border Foods. According to Smith, the market segment is expected to top more than $8 billion in sales in 2011.

“We are pleased to now have a position in this growing market with Border Foods’ quality products,” Smith said.

An Associated Press story misleadingly called the new owner of Border Foods an “Illinois-based condiment manufacturer and marketer.”

In reality, Mizkan Americas is a subsidiary of the Mizkan Group, a 200-year-old private company headquartered in Handa City, Japan.

In addition to its home country, Mizkan Group has operations in China, Hong Kong, Taiwan, Singapore, Thailand, the United Kingdom, and the United States.

In the last six years Mizkan Group has expanded across the US, with its subsidiary swallowing up Holland House Cooking Wines, the Gourmet Specialty Division of Imperial Brands, World Harbors marinades and sauces, Creole Fermentation of Louisiana and now Border Foods.

Running a large plant on the outskirts of Deming, Border Foods has enjoyed a commanding position in the New Mexico chile industry during the past couple decades- especially in the green and jalapeno market segments- through its production contracts with growers.

Border Foods’ geographic location, about 30 minutes north of the US-Mexico border, also allows it to easily import large amounts of tariff-free chile from Mexican farms.

The chile processor first opened for business in an old World War Two military warehouse during the early 1970s. Later, in 1990, Border Foods moved into a bigger facility in the Deming Industrial Park.

Border Foods expanded under the helm of the late Martin Steinmann, who gained majority ownership of the company in 1983.

A former president of Uncle Ben’s Rice, Steinmann credited his company for making chile growing a vibrant commercial enterprise in Luna County, which eventually overtook neighboring Dona Ana County and its famous chile center of Hatch in terms of production.

By the end of the 1990s, Border Foods annual sales were estimated in the $50-$100 million range.

Border Foods’ production lines have employed large numbers of immigrant workers over the years, reaching as many as 1,500 full-time and seasonal employees at one point. Reportedly, the company now employs 700 workers.

Early last year, the New Mexico Environment Department (NMED) approved a wastewater permit for Border Foods that allows the company’s plant to discharge 1.1 million gallons of chile wash water per day. According to the NMED, Border Foods planned to use the discharge on 136 acres of crop land.

Mizkan Group’s acquisition of Border Foods is the second time in about as many weeks that an important New Mexico food company was bought out by a larger foreign outfit. Late last month, the Mexico-based Grupo Maseca announced it had taken over Albuquerque Tortillas.

Additional sources: Deming Headlight, May 13, 2011. Article by Matt Robinson. Associated Press, May 13, 2011. PRNewswire, May 12, 2011. New Mexico Business Weekly, September 18-24, 2009. Article by Kevin Robinson-Avila.

Frontera NorteSur: on-line, U.S.-Mexico border news Center for Latin American and Border Studies New Mexico State University Las Cruces, New Mexico

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