Food industry contractors 'busier than ever'
- Improvement and expansion
- Consequences of the horsemeat crisis
- Safety
- Regulations
- British sugar saves 40%
Contractors and engineering firms in the food business say they've been busier than ever in recent months, in spite of continuing economic queasiness across the UK and Europe.
"There has been quite a high level of activity in the food industry during the first part of 2013," says John Moxon, business development director at Clegg Food Projects. "Our enquiry level both for design and feasibility work and also for projects that have proceeded to implementation was higher in early 2013 than for the last two to three years."
"For us it's been very good at the moment," agrees Roy Klek, a director at Lorien Engineering Solutions. "Certainly the food and drink sector is the strongest performing sector for Lorien, accounting for between 60 and 80% of recent business, although whether that's a fair reflection of the wider market is difficult to gauge."
The vast majority of work involves upgrades and expansions, rather than greenfield projects.
Improvement and expansion (Return to top)
"The proportion of projects under consideration or in progress in the UK remains heavily weighted towards the improvement or expansion of existing premises. In terms of project numbers, 80 to 90% are of this type," says Moxon. There are several reasons for this, he argues, including the need for greater efficiency, which drives consolidation, either within business groups or following mergers and acquisitions. Businesses are also under pressure to squeeze more from their assets, which creates further pressure to improve efficiency.
"Greenfield projects are few and far between," says Klek. "We target a lot of blue chip manufacturers who have multiple sites around the UK. They're looking to reduce costs so they're looking to get greater utilisation of their existing assets. They don't want new buildings and factories; they want to invest in what they've got."
Lorien's recent project with Morrisons-owned abattoir Woodhead Bros Meat Company is a good example. The company is investing £20M to extend the existing facility at Colne, Lancashire. Even before the expansion, the site was the largest three-species abattoir in the country and the extension is doubling the amount of pig meat the facility can produce.
As well as increasing capacity, greater automation is a key focus of the project. For instance, a fully power-assisted and electronically controlled storage system in the chillers automatically routes the product through the 3MW chiller unit to the chilled holding rails, where the product is held until the computer calls it off to go to the butchery for de-boning and packaging. This will achieve very high standards of hygiene and quality, according to Klek.
"Morrisons is a good example of a brownfield project," he says. "Morrisons has a lot of facilities within it manufacturing network and has been investing a lot to maintain its high standards. With recent developments in the meat industry, it looks like that strategy is going to pay off."
Consequences of the horsemeat crisis (Return to top)
Moxon agrees that the recent horsemeat debacle could drive investment going forward: "It seems that 'local sourcing' of raw materials and processed foods is likely to be a driver in the coming months and years as retailers and producers deal with the consequences of the horsemeat issues from earlier this year."
But project activity is not confined to meat processing. For example, the jobs that Moxon and his colleagues at Clegg have already been involved with so far this year include upgrades or expansions at sites for ready meals, eggs and brewing, in addition to chicken processing.
Meanwhile, Klek says the dairy sector is also very busy for Lorien. For example, in February the firm was appointed by Adams Foods to relocate cheese packing lines from Wincanton in Somerset to Leek in Staffordshire. "The dairy sector is fiercely competitive and dairy firms are looking to reduce costs. That includes capital spending on plant and equipment and operating costs in energy and sustainability, with pressure to bring down utility costs," he says.
Another reason engineering and contracting firms are experiencing an upsurge in food industry business is that it's becoming more difficult for food firms to take on the project management role in-house with any confidence. That's partly because upgrades and expansions often involve setting up a construction site in the midst of a working food production facility.
Safety (Return to top)
Nick Willett, project engineer with Willett Food Projects, explains: "Contractors need to walk through the main factory in a hairnet and white coat, then enter a construction compound and don a hard hat and hi-vis jacket. You need to get the right mix between health and safety and food safety. It's something we've only really been able to learn in practice.
"The food industry is very much behind the construction industry when it comes to contractor control. This is an area we are becoming increasingly involved in due to our perfect accident record over the past 10 years. It is also clear that construction health and safety experts struggle to grasp the food safety implications of working in a production facility and the production engineer fails to understand the detailed scrutiny that contractors require."
"The key to getting things right is experience," agrees Mark Reeve, md of Chalcroft Construction, arguing that it can improve the functionality of the site over its lifetime, not just during the construction phase.
"Understanding how a small change could affect future possible uses – and value – of a facility can make a huge difference," he says. "For example, making sure drainage for different parts of a site can be segregated might not be an immediate need for your new project, but as you cannot run low care drainage through a high care area, it can make the facility more flexible in the future if needs change. That's important because for Chalcroft, 90% of our projects are not new build – be it greenfield or brownfield. We tend to work within an existing facility around a live production environment."
A key consideration on the health and safety side is the Construction Design and Management Regulations 2007 (CDM). CDM says the Health and Safety Executive (HSE) must be notified of any job amounting to more than 30 days or 500 man days and the work should meet strict health and safety standards.
Regulations (Return to top)
"The regulations expect a lot more from site managers than they used to," says Willett. "Bigger food firms have caught up, but there are SMEs [small- and medium-size enterprises] that have never even heard of CDM. Now there's an update coming in 2014 and that's going to get a lot more publicity."
He argues that the current CDM regime is so demanding that it's on the verge of creating a two-tier system, with only the biggest food companies able to get to grips with the levels of competence and reporting required. The new version should simplify things.
"HSE is going to relax some of the rules so smaller firms can implement the regulations more cheaply, but they're looking to take in more companies. Many of these won't have the expertise in house," says Willett.
Even household names can feel more comfortable outsourcing project management responsibilities, and Willett has spent the past year helping iconic British baker Hovis (owned by Premier Foods) with a massive programme of upgrades. A significant part of this work has been on the baker's 'Big Box' project.
"Ovens, coolers and provers are all basically big boxes and they're looking to refurbish the lot over a three-year programme. They've had to keep production up because they get fined by the retailers for every basket of bread they don't deliver. They have between one and three lines on each site, so they've been closing down a line at a time. It's been difficult because a lot of site engineers are only just getting their heads around CDM," he says.
The trend towards working around existing operations adds an extra layer of complexity to any project and Klek says that's driving the need for smarter software tools. "Historically we used 3D modelling but increasingly we use 4D systems that add the timeline and planning into the package. It's really like storyboarding using software. For the client, it shows when each phase will be completed and they can assess the possible impact on their operations. It provides an additional level of information to help companies manage the impact of any work."
Moxon goes a step further, predicting that something called the Building Information Model (BIM) will increasingly be used to keep track of facilities throughout their working lives. BIM is an international initiative to produce standardised models that will develop over time as the real buildings do. It's another tool that started life in construction.
"Uptake of the new BIM technology, a 3D integrated design and planning tool, is slow in the [food] sector but we predict a wider uptake over the next few years, particularly for more complex projects," he says.
With projected lifetime costs increasingly important in initial investment decisions, the burden of continuing maintenance demands is a growing consideration. "The integration of future maintenance needs into the design and implementation of a project is also becoming more common," he says.
Moxon is convinced that liaising with the site engineers during the design and procurement phases of a project is the key to getting the basics of future maintenance right. Having the right equipment warranties and training during installation and commissioning, together with the incorporation of maintenance contracts into equipment procurement, can have a big impact on future costs.
British Sugar saves 40% (Return to top)
British Sugar has cut its maintenance spend on tools and production consumables at Europe's biggest sugar refinery in Wissington, Norfolk by 40%, by letting distributor Buck & Hickman manage its stock inventory.
Buck & Hickman's vendor managed inventory (VMI) services cover the ordering and supply of products with the team.
Wayne Meneely, stores manager at British Sugar Wissington, says: "In the two years since Buck & Hickman introduced VMI to our stores, we have enjoyed a 40% reduction on our consumables spend, which equates to a considerable saving of around £12,000."
