Baking & Snack - November 2005 - 20

22-year veteran tortilla industry salesman as executive
vice-president of sales and Thomas Rowell, who had a
solid history of cost accounting as c.f.o. More recently,
Matt Landes joined the team as director of operations,
quality assurance and supply chain logistics.
"This is a unique management team," Mr. Sommerhalder
said. "We each have our areas of expertise and work well
independently and as a cohesive team. Brett and David put
together a great concept, and David possessed the practical
experience and contacts to do things right. I came in to help
verify the business plan. David brought in Alfredo, who was
in tortilla sales with a company in Oklahoma City."
"The quality product we produce, the business and the
operation combine to make my job easy." Mr. Elias noted.
"It is almost as simple as presenting potential customers
the three pillars of our business and letting it sell itself. Our
potential is unlimited."
AN AMBITIOUS PLAN. "As part of the business plan, our
initial goal was to sell a small number of SKUs to highvolume customers and to make operations as efficient as
possible especially while the systems, people and business ramped up," Mr. Sommerhalder said. "And we were
going to do things first class from the beginning." Priorities
were to acquire an appropriate manufacturing facility that
incorporated efficient line setup, processing flexibility and
significant expansion capabilities.
Mr. Cardenas also had past experience in construction,
which lent itself well to plant design and layout. So when
he first viewed the 127,000-sq-ft facility that previously
housed an apparel manufacturer and was still full of
equipment, he was able to visualize the transformation.
"It was perfectly designed for tortilla processing," Mr.
Cardenas said.
Mr. Cardenas initially designed and laid out processing
systems at full plant capacity. "We felt it critical to have a
long-term approach from the beginning," Mr. Sommerhalder noted. "David first planned full capacity. We then agreed
to start with two lines. This way, expansion is already designed into the layout and can be accomplished quickly."
The design includes perimeter space for personnel,
forklift traffic and aesthetics of an open production environment. Production set-up is in the center of the building, and future expansions will work out from there.
The company, formed in mid-2004, acquired the building in October and 68 days later was producing its first
salable products. However, to get to that point, Lobo had
to gut and refurbish the building before it could install new
equipment. "It took 118 trucks to haul out all the old equipment," Mr. Cardenas stated.

and warehousing. All support departments - QA lab;
the control, mechanical and meeting rooms; and chemical storage areas - are located along the perimeter walls,
and each has security access.
Total investment was more than $10 million in equipment and approximately $4 million in building and
refurbishing costs. "We made sure design, layout and
construction left room for future expansion," Mr. Sommerhalder said. "We have space for additional silos, air
handling and boiler equipment, and we designed process
and traffic flow patterns that will be appropriate as we expand. We are in a secure position with our shareholders
and investors for any future expansion or investment."
Mr. Sommerhalder noted that the initial management
team did a lot of wishful thinking, and most of it came to
fruition. "We are extremely fortunate that management
and investors believed that if we did things correctly in
the beginning, we would already be one big step ahead
when we entered the marketplace. There are not a lot of
companies that have the ability to do this upfront." Do it
right, do it best, and good will follow - that's the management mantra.
The results are self evident. Currently, the business
employs close to 100 associates with several levels of process management, has a total of 300 SKUs and produces
upwards of 20 SKUs per month for its largest customer.
"We have a high priority to maintain flexibility and the
ability to customize any product for our customers," Mr.
Landes added. "We believe customer service is critical;
and it applies to how we treat our customers and how we
are treated by our suppliers."

UNPRECEDENTED RESULTS. The building includes
7,000 sq ft of office space, 20,000 sq ft for packing, 4,500
sq ft in the shipping area and 95,000 sq ft for processing

November 2005 / BAKING & SNACK / 23

Baking & Snack - November 2005

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