Expansion Issues in the Food & Drink Industry

By: Meller Ltd Click author's name for more of his/her articles

In our experience, as construction consultants, there are seven vital topics that need to be understood when considering an expansion within the Food and Drink industry. By taking into account these areas you can significantly reduce pitfalls and ensure a successful outcome for your project.

The areas to consider are:
• Time, Cost and Quality
• Client Requirements
• The Planning Authorities
• People and Amenities
• Services
• Production
• People and Stakeholders

Time, Cost and Quality
Most schemes involving expansion result from new or increased business. For many manufacturers this could mean that the expansion has to be completed to a tight deadline. In this case the first consideration are lead times for equipment and basic materials, eg process equipment, machinery, steel etc which can easily run into 12 weeks.

Next, an initial budget has to be calculated in terms of the process and construction costs. This cost exercise is best completed by a Quantity Surveyor, either in-house or independent resource.
The Quantity Surveyor, will compile a feasibility study/option costing exercise which will look at the most cost effective way of achieving the expansion brief and also advise the Client of a realistic budget for their project.
In some cases there may be a significant discrepancy between the Clients original budget allowance and the realistic cost, eg a Client thinks that the expansion will cost £2m, when, after basic cost checks, the budget should be doubled. Sometimes, it is only upon further investigation that the true costs can be confirmed. Issues such as ground remediation works can be more than the total budget if contamination is found.

For new product line, costs need to be analysed with the expected revenue in mind. This determines whether the scheme is feasible in the first place. This is normally worked out using the estimated cost of the scheme, spreading it over a number of years and then working out the price the Customer will pay for the product. Schemes have been cancelled due where it has been shown the construction costs would result in the product price being outside an identified price point. However, by using professional consultants, skilled in the industry there are always way to reassess budgets to ensure overall profitability.

With any type of build project the construction and process must be suitably fit for purpose. For example, if the project was to extend an ambient warehouse for canned goods it would have a relatively simple design and quality requirements, whereas, to create a production line processing shellfish dishes, would require specialist materials and finishes to maintain hygienic food standards.

Health & Safety is another area which can dictate the quality of the build, either through legislative requirements, process requirements or those imposed by the Client’s insurers, such as issues relating to fire safety or environmental considerations.

Client Requirements
Existing facilities must not be compromised whilst building or installing other equipment.
Production must never be affected. This means that the scheme must be well-managed and co-ordinated to ensure that the facility is not disrupted in any way. There are several ways this can be achieved. The erection of temporary food hygienic screens or production tunnels, whilst work is being carried out, can all protect production.
These measures will maintain a high level of hygiene, which when managed correctly will not be compromised at any point.
In addition to these measures, additional hygiene regimes, such as additional wash-down periods etc. will further ensure the high standards are upheld.

The Planning Authorities
Local planners are keen to see developments in the area but not necessarily the development of food factories. This is may be due to the impression that these types of facilities make noise, increase traffic, create smells and are perceived to be industrial in their architectural design. However, reaction of local planners does vary from area to area. Planning Authorities require a thoughtful approach as they can have a lot of influence over what you will be able to achieve.

Car parking is becoming a key issue for businesses across the whole of the UK. Local Authorities, keen to see green travel plans adopted may demand a pro rata reduction in on-site car parking, even when the business is expanding. On the other hand there may not be room for additional car parking on site. This would require consideration of staff’s travel options, such as car sharing, the provision of park and ride facilities or putting buses on for staff members to get to and from work.

Expansions normally mean an increase in traffic. particularly deliveries. Increased lorry movements will undoubtedly raise issues for local residents and other businesses. The hours of the day that vehicles arrive onto the site may increase this resistance but, where effectively managed, can result in both parties being satisfied. The local authority may also start to talk about adopting roads or the upgrade of local facilities, which can be quite costly.

A good Project Manager would be able to guide and advise you through each stage of the development, ensuring that all planning requirements are met and to negotiate on your behalf requirements which are deemed unnecessary or disproportionate.

People and Amenities
Expansion plans may create or alter shift patterns, which could impact on staff facilities as well as on site parking. If there is an increase in the number of staff on site at any one time, then a revision of amenities will be required to cope with the expanding workforce. This could mean additional toilets, changing facilities, canteen facilities, lockers etc.

On-site safety is a vital consideration due to the increased vehicle movements and/or people movements. Lorries, cars, fork-lifts and people all need clearly defined access routes to ensure the safety of all personnel. This will probably necessitate an upgrade of the site infrastructure, possibly requiring new barriers, walkways, monitoring stations and security huts, supported by training to communicate these changes to all staff.

From a logistical point of view, you will need to assess the future expansion plans of the company. It may be that you are operating in a high employment area where potential employees are difficult to find. This may negate the validity of a plant expansion if the resources are not in place to keep it operational.

Services
Increased levels of packaging and trade waste have a large impact on service yards, due to the requirement of more waste compactors or additional external services. The amount of space needed may impact on planning. The water authority dictates what can be discharged into the existing water system. During construction, temporary storage facilities, in the form of septic tanks to restrict the flow of waste into the water course, may need constructing.
Effluent treatment is a key issue for most expansion projects, although treatment plants are expensive, they may be a necessity due to environmental issues relating to planning and also due to the exorbitant costs now associated with waste disposal.

Costs to increase the existing utilities (mains water, gas or electricity) can be astronomical. In some cases gaining approval for the upgrading of the supply may take months, jeopardising your project deadline. Added to that, the diversification of the services has created a minefield to try to navigate your way through simply to find out who is responsible for supplying what. Again, using an experienced company to deal with these authorities will save you time and therefore money.

Production
Understanding what equipment is arriving and co-ordinating this with the services is crucial. If the equipment is understood, from a service point of view, then it can be connected without issue and this will maintain the programme for the scheme’s delivery.

If the commissioning is organised and managed properly there will be no costly delays to the scheme. However, relocation of key plant and equipment could cause periods of shutdown. These periods need to be co-ordinated to ensure that production is not affected. Options to maintain production can include creating temporary production areas, with temporary equipment brought on-line before the main production is shut down. This will enable construction to take place in areas of main production and ensures that the product is kept moving through these temporary lines.

Any expansion or refurbishment of production in a factory will create added pressure on other areas, such as goods in, packaging and product storage. These areas are often overlooked in the expansion plans; however they are some of the first sections where bottlenecks will occur due to added pressure on these facilities. An experienced design team would take into consideration all areas of the site, to identify where changes in one area could affect another and take action to avoid these risks.

People & Stakeholders
Pulling key technical and engineering personnel away from their day-to-day role may cause shortfalls in production. A process of weighing up the effect of these shortfalls, versus the cost of professional outside help, should be completed.

Many schemes involve the increase of a factory’s efficiency, due to the added pressure from supermarkets to drive costs down. Expansion and refurbishment plans involve some form of automation, or the rationalisation of the labour force to create efficiencies. Therefore, redundancy costs may also need to be taken into account.

Expansions on one site may also mean the demise of another site. Local authorities will not count the transferred workforce as the creation of new jobs. This could effect any application for grants and the Client’s image within the community. This must be taken into consideration and possible budget put aside to cover public relations.

Expansion in any industry is always fraught with issues. However, with an understanding of the requirements of an expansion scheme in the food and drinks industry, the best use of time and money can be achieved and the project will be enjoyed by all those taking part.

Article Source: ABC Article Directory

About The Author: Meller Food & Drink Solutions are a UK Construction Consultancy, whose advice has been the basis for over 500 Food & Drink construction projects. Meller have provided our services for major Food & Drink Clients including Nestlé, Unilever and HJ Heinz. From small expansion schemes to multi-million pound projects, we understand the requirements of specialist builds including production and warehousing facilities. To find out more visit www.mellerltd.co.uk or call 01509 670036