In many ways, food manufacturers are just like any family. They start out in a small property, start to grow, and then have a decision to make. Do they move to somewhere bigger - ideally building the new home if they can afford to - or do they get the builders into the old place to put on an extension?
Matthew Hicks, senior project surveyor with Davis Langdon, says there are many reasons why a food processor might consider developing its existing factory or building a new facility. These range from strategic growth of existing product lines, through diversification into new products, to simply wanting to streamline process flows and improve overall efficiency. But whatever the reasons, he says there are predominantly four options open to companies planning for growth: a new build; an extension to an existing factory; refurbishment of an existing facility; or a "developer build and client fit-out" approach, in which the food manufacturer just pays for the processing equipment and rents the building from the third-party developer.
With 18 offices in the UK and 85 worldwide, Davis Langdon is one of the largest international practices of project managers and construction cost consultants. Its Peterborough office has a long history of involvement with the food sector and is currently working with food processing clients such as Bakkavör, Northern Foods, Greencore and Premier Foods; on a range of new build and refurbishment projects.
As Hicks points out, a new build is not necessarily a greenfield project: "We find many food companies are looking at grant-aided areas, such as old colliery sites up here in Nottingham and Yorkshire. And the 'developer build' approach allows them to look at ways of reducing the amount of capital they have invested in property."
Problem with 'developer build'
The problem with this approach, however, is that unless the original development was purpose-built for food processing, the "client fit-out" part of the project might turn out to be not quite as cost-effective as originally planned. "A lot of developer-build projects are really shells with limited amenities, based around warehouse or distribution centres," says Hicks. "But a food factory, particularly a labour-intensive one, under the same roof would need considerably more office space, canteen and changing facilities and so on. And there's also the car parking problem." Similar concerns also have to be considered when planning extensions, of course, but in most cases such infrastructure will already be in place and itself relatively easily extended where necessary.
Extensions and refurbishments (particularly the latter) have two major difficulties compared with new build or developer-build client fit-out options. The first centres on the construction process itself, which in many cases has to take place alongside - or integral with, in the case of refurbishments - a fully functioning factory environment. And the second kicks in when the building itself is completed and the new facility meets the old.
Steve Giltrap, md of Nottingham-based Clegg Food Projects, says: "There can be an issue when interfacing between new and old specifications, although generally speaking it's something the clients end up learning to live with." He says that Clegg has done a lot of work in the past five years or so in extending or refurbishing existing facilities. "Cost is always a driver," he says, "and it's not always an option to renew floors, ceilings services and so on throughout an existing factory just because you would ideally like them to match up to the shiny new extension. So there is always a degree of compromise involved."
Insurance issues
It's not just a question of aesthetics though. Both Giltrap and Hicks highlight the impact that insurance companies can have on an extension or refurbishment project. "Panel replacement for walls and ceilings is a big issue," says Giltrap, echoed by Hicks who points out that "insurers won't touch you if you even think about putting polystyrene panels in the [new] building. Mineral wool core panels are now the preferred choice"
Moreover, as they both say, faced with taking on the fire risk presented by old-style polystyrene- and polyurethane-cored insulated panels in food factories, many insurance companies asked to provide cover for an extension will now take that opportunity to insist that all the old-style panelling be replaced at the same time - adding considerably to the cost of the extension. "It's not just the cost of the panels," explains Hicks, "it's taking down the walls, the services and so on. Then having to put them all back again after the panelling."
The other side of that coin, however, is one Hicks also notes. Many food companies, he says, are now installing sprinkler systems for fire protection - not just because some insurance companies might require them, but also because of the financial benefits to be gained by reducing their insurance premiums. "We have done designs for retrospective fit-out of sprinklers", he says, "where the client has said the payback period could be as little as three or four years, purely in terms of the savings on insurance premiums."
Other issues surrounding the problems of tying in the new with the old include the ever-changing tide of regulations - building, health and safety, and environmental - that all manufacturers have to keep abreast of.
Energy efficiency
Under the Building (Amendment) Regulations 2002, for example, there is now a demand for buildings to be more energy efficient. As energy services director for the facilities services company Dalkia, Mike Sewell has been involved in helping many food companies reduce their energy wastage through environmentally friendly plant design. With a staff of 3,000, Middlesex-based Dalkia manages about 5,850MW of electrical power and 81,500MW of thermal power across 18,500 industrial and commercial client sites around the world.
Sewell says: "In an ideal world you would re-engineer central services to support an extension, but that can be difficult." The problem is not so much cost in his experience, but more the tight time schedules applied to the majority of extensions and refurbishment projects in the food industry. "You often find projects don't have the lead-in time for major plant installations," he says. The result can often be "a series of packaged solutions sitting on skids in car parks". He cites chillers as a typical example, where "you can end up either with the central plant fighting to supply the extra equipment, or - if the central plant actually has a load taken off it - you find what was an efficient piece of design suddenly becomes quite inefficient."
There is no doubt that companies in the food sector are becoming increasingly conscious of the need to reduce the size of their carbon footprint, to use the latest in-vogue terminology for what is essentially just good energy management. "What's driving it is legislation," says Sewell, "but corporate responsibility is also now much better, certainly in blue-chip clients. Their customers expect them to take note and want to see them building more environmentally- efficient buildings. We have done a lot of work with Tesco on its depot side, which is a good example of a company trying to make a difference."
Sewell sounds a note of caution though for companies tempted to jump on the renewable energy bandwagon. "Realistically, unless you put up a 1MW wind turbine mast, it doesn't really stack up as an environmentally-efficient way of generating energy. And there is certainly more interest in using solar energy for hot water than for photovoltaic power generation," he says.
Good engineering solutions
That said, however, he is finding growing interest from companies looking into more effective heat recovery from their plants, combined heat and power units, extracting water from boreholes, recycling grey water - "all those good engineering solutions" as he puts it.
Giltrap also sees a growing environmental trend in many of Clegg's projects. "One proposal at the moment," he says, "is to use the fat by-product of a client's process as a fuel - although we're at an early stage with that." Clegg recently completed a major extension for Palethorpes (formerly part of Northern Foods before its February sale to Vision Capital) at Market Drayton, that Giltrap says was a good example of having to do building work in an existing factory environment, on a very tight site, and with a very close interface with continuing production.
This is a common difficulty with extensions and refurbishments, as opposed to new builds. "It's quite a specialist management task," says Giltrap, "and one where we think we have a considerable amount to offer, over and above the average contractor or designer."
One example of this is Clegg's insistence that all its own staff and those of its suppliers, working on a food project have all taken part in the Food Safety Passport scheme.
He concludes: "It certainly helps if you have people that have a basic understanding of how a food factory works and what the safety issues are". FM