Food & Drink Business Europe

March 2010

Greencore completes refocus on convenience foods

Food & Drink Business Website:

www.foodanddrinkbusiness.eu

C o n t e n t s

- 3 N EWS B RIEF

- 37-40 F OCUS ON I RELAND

Business news from the UK and international markets.

Ireland – The food export island.

Top 50 food & drink manufacturers in Ireland.

Financing in a difficult market.

- 6 B REWING & D ISTILLING Developments in the global alcoholic drinks sector.

PAGE 3

Per Stromberg, ce, Lantamannen.

PAGE 7 Jean-Francois van Boxmeer, ce, Heineken.

R EGULARS Materials & Ingredients . . . . . . . . . . 10 Logistics & Distribution. . . . . . . . . . 25

- 8 M ERGERS & A CQUISITIONS

Processing & Manufacturing . 31-35, 43-47

Coverage of British and international deals.

PAGE 8

Pierre Pringuet, ce, Pernod Ricard.

Factory Optimisation . . . . . . . . . . . . 31-35 PAGE 3

- 9 B AKERY

Paul Bulcke, ce, Nestle.

Water Treatment solutions from Puresep. . . . . . 44 Bottling & Packaging . . . . . . . . . . . 48

UK and European bakery news.

Energy & Environment . . . . . . . . . . 48

- 13 C OVER S TORY

PAGE 13

Patrick Coveney, ce, Greencore.

Managing Director: Colin Murphy Editor: Mike Rohan Sales Director: Ronan McGlade

Greencore completes refocus on convenience foods.

Advertising: Susan Doyle Senior Sales Executive: Paul Lees Production Manager: Susan Doyle Production Assistant: Jackie Kinch

PAGE 5

Paul Polman, ce, Unilever.

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- 19 E GG P RODUCTS

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Ready Egg Products set to crack new markets.

- 27 F ROZEN F OODS

PAGE 6

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Ardo UK consolidates with £16m development.

Indra Nooyi, ce, PepsiCo.

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N N E E W W S S Profit Tumbles at Lantmannen Annual profit at Swedish food group Lantmannen declined sharply from SEK622m to SEK85m, after net financial items and adjusted for items affecting comparability, in 2009. “Although the Lantmannen Group reported a fall in profits compared with the previous year, we are cautiously optimistic that the economic situation is slowly starting to improve. The recovery may take longer for agriculture, but we still have a strong belief in our green industries,” says chief executive Per Stromberg.

Per Stromberg, chief executive of Lantmannen Group.

Kraft to Accelerate Growth With Cadbury Acquisition The combination of Kraft Foods and Cadbury is expected to realise pre-tax cost savings of at least $675m annually by the end of 2012, with total onetime implementation cash costs of approximately $1.3b. The combined company is targeting long-term organic net growth of 5% or more.

“We’re ready to begin an exciting new chapter at Kraft Foods, with Cadbury’s brands as a valuable addition to our portfolio. Together, we’ll

Irene Rosenfield, chairman and chief executive of Kraft Foods.

remain focused on driving sustainable top-line growth, while delivering against our cost savings and synergy opportunities.

As a combined entity, we are well positioned to deliver toptier performance and accelerate our long-term growth,” says Irene Rosenfield, chairman and chief executive of Kraft Foods.

Strong Performance

By Nestle Nestle has reported sales of SFr107.6b (Eur73.5b, $99b) for 2009, with organic growth of 4.1%, including real internal growth of 1.9%. Foreign exchange decreased sales by 5.5% and divestitures, net of acquisitions, by 0.7%. The largest segment was food and beverages with sales of SFr99.8b, with organic growth of 3.9%, including real internal growth of 1.6%. Foreign exchange impacted food and beverages’ sales by -5.7% and divestitures, net of acquisitions, by -0.7%.

The acceleration of the Swiss food giant’s efficiency drive as part of the ongoing Nestle Continuous Excellence initiative yielded over SFr1.5b in savings across all operational segments.

Group EBIT margin advanced 30 basis points reported, and by 40 basis points in constant currencies, to 14.6%, with an EBIT of SFr15.7 billion. The EBIT margin for food and beverages was also up 30 basis points reported, and up 40 basis points in constant currencies.

Net profit was down substantially at SFr10.4 billion in 2009 but is not directly comparable with the previous year because of the SFr9.2b profit on the disposal of 24.8% of Alcon in 2008.

“With organic growth of 4.1% achieved in last year’s challenging environment, we were able to grow substantially faster than our industry.

Combined with the further significant improvement of the EBIT margin, we delivered on our projection in line with the long-term Nestle Model,” comments Paul Bulcke, chief executive of Nestle. “We stepped up investment in our brands and

B B R R II E E F F

Paul Bulcke, chief executive of Nestle.

“2009 marks the end of numerous adjustments which we have implemented in the past 18 to 24 months in order to strengthen our model and adapt it to the new environment: this includes the change in our Asian footprint, the strengthening of our financial structure, the improvements of the category trends in Waters and the focus on global brands in Baby and Medical. It obviously includes as well our reset plans in the Dairy division,” says Franck Riboud, chairman of Danone.

“While facing an environment which, we believe, will remain challenging in 2010 in many respects, Danone is emerging stronger from these two years, and ready to grab the many opportunities that exist in our categories.”

For 2010, Danone is targeting like-for-like sales growth of at least 5%, an increase of the free cash flow from operations of at least 10% on a reported basis, and a stable trading operating (EBIT) margin versus 2009 on a like-for-like basis.

A Year of Adjustment For Danone

Robust Performance by Kerry Group

Danone has reported a 1.6% decrease in sales to Eur14.98b for 2009. However, excluding the effects of exchange rates, total sales increased by 2.3% on a like-for-like basis, driven by a 5.2% rise in volume and a 2% decline in price/mix. Trading operating income edged ahead from Eur2.27b to Eur2.29. or by 7.4% on a like-for-like basis.

Underlying net income rose from Eur1.31 to Eur1.41 (likefor-like growth of 11.4%).

Danone’s like-for-like European sales fell 0.3% to Eur8.96b with volume growth of 2.2%. Danone’s trading operating (EBIT) margin improved by 61 bps to 15.31%, on a like-for-like basis, in 2009.

The strong margin improvement was mainly due to a significant improvement of the gross margin due to lower raw material prices, mix, leverage as well as ongoing efficiency and productivity gains and the last part of the Numico cost synergies.

Kerry, the global ingredients, flavours and consumer foods group, has reported sales revenue of Eur4.5b for 2009, reflecting a 4.8% reduction on a like-for-like basis. However; allowing for elimination of noncore activities as a result of the ‘go-to-market’ and business restructuring programmes, improvements to product mix, lower pricing and trading currency movements; continuing business volumes were 2.2% ahead on a group-wide basis.

Business restructuring in the Irish group’s ingredients and flavours regional businesses was completed by year-end and was well advanced in the consumer foods division.

Trading profit increased to Eur422m, reflecting a 3.8% like-for-like increase and 80 basis points improvement in the group trading profit margin to 9.3%. Group profit before tax was up 4.8% to Eur251.9m.

On a like-for-like basis, sales revenue in ingredients and

the pace of our innovation, adapted our products to the changing needs of consumers and further accelerated efficiencies. These actions, together with the disciplined alignment of our people behind clear strategic priorities, allowed us to again combine a strong top and bottom line performance in 2009, coming on top of excellent results in 2008.”

He expects the food and beverages business to achieve higher organic growth in 2010 than in 2009 and a further EBIT margin increase in constant currencies.

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

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N N E E W W S S flavours declined by 4.5% to Eur3.3b and trading profit grew by 4.9% to Eur340m, contributing a 90 basis points improvement in trading profit margin to 10.4%.

Like-for-like sales revenue at the consumer foods division declined by 6.1% to Eur1.7b and trading profit was unchanged at Eur122m.

Business efficiency programmes, including ‘lean manufacturing’, enabled the division to grow its trading profit margin by 40 basis points to 7.1%.

“The Kerry business model performed robustly in what was a challenging environment in 2009 – delivering excellent product and business development opportunities, good margin improvement and cash generation. Our group trading profit margin increased by 80 basis points to 9.3%, with ingredients and flavours contributing a 90 basis points improvement and consumer foods achieving a 40 basis points margin improvement.

Our strategies and investment programmes will enable sustained business margin improvement and we are confident of delivering earnings growth in 2010,” says Stan McCarthy, chief executive of Kerry Group.

almost all of its countries of operation. However, net profit decreased from Eur615.4m to Eur372.8m due to lower proceeds from litigation settlements and a reduction in net financial income.

In Italy, net revenues fell from Eur1.07b to Eur992.6m but EBITDA edged ahead by Eur2.3m to Eur112.0m. In the rest of Europe, excluding Italy, net revenues dropped from Eur164.9m to Eur135.9m and EBITDA declined from Eur24.2m to Eur18.4m.

Irish Dairy Co-operative to Restructure Lakeland Dairies is to close its milk drying facilities at Lough Egish with the loss of 60 jobs.

The move is part of a restructuring programme to keep the Irish dairy co-operative competitive.

Raisio Enters Growth Phase Finnish food group Raisio is now moving to a growth phase after achieving a slight improvement in profitability during 2009, with EBIT, excluding one-off items, rising from Eur20.2m to Eur20.5m. Net sales from continuing operations in 2009 dropped 18.8% to Eur375.9 million. During the year, Raisio sold its margarine business to Bunge for Eur80m. “Raisio’s main target in 2010 is to increase net sales.

This will be sought through organic growth in the home market and through acquisitions in Europe,” says Matti Rihko, chief executive of Raisio.

B B R R II E E F F ture during the year by 80bps.

Margin development was underpinned by volume efficiencies and savings of Eur1.4b from lower supply chain costs and a leaner organisational structure.

“Our brands are stronger, driven by better quality innovation and a step-change in advertising and promotional expenditure.

We have further strengthened our leading positions in developing and emerging markets and made encouraging progress in re-establishing volume growth in Western Europe,” says Paul Polman. “The organisation is moving fast towards a stronger performance culture.

We are faster and more agile and focused on serving over two billion consumers every day.”

He expects continued pressure on consumer spending power and heightened levels of competitive activity in 2010.

Unilever will continue to focus on volume growth as the main driver of long term value creation, whilst delivering steady and sustainable year-on-year improvement in operating margin and strong cashflow.

On the food and beverage side of its business, the ice cream and beverages business increased sales by 4% to Eur7.6b but sales of savoury, dressings and spreads fell by 0.1% to Eur13.3b.

Stan McCarthy, chief executive of Kerry Group.

Operating Profit Improvement at Parmalat Italian dairy group Parmalat increased EBITDA by 16.2% to Eur367.8m in 2009 on net revenues up 1.4% to Eur3.96b.

Although facing continuing strong competitive pressure from private labels, Parmalat improved profitability through price increases and from savings on raw milk purchasing in

Kraft to Close Cadbury Factory Kraft Foods is to proceed with the proposed closure of the Cadbury factory at Somerdale, near Bristol, England, despite having indicated it would retain the plant during the US food group’s recent five months takeover battle for the UKbased confectionery group. The factory will be closed by 2011 with the loss of 400 jobs and production will be moved to Poland, where Cadbury has invested Eur114m in new facilities. Cadbury’s planned investment of £30m (Eur34m) at its main English site at Bournville is unaffected.

Solid 2009 Performance

By PepsiCo

Good Progress

By Unilever Although full year operating profit slumped by 30% to Eur5.020b and net profit was down 31% to Eur3.659b, Unilever made good progress in challenging market condition during 2009, according to chief executive Paul Polman.

Turnover declined by 1.7% to Eur39.82b but underlying sales growth was 3.5% and underlying volume growth at 2.3% accelerated through the year reaching 5% in the fourth quarter. Unilever increased advertising and promotional expendi-

its own stores during the period before Christmas and more profitable sales through its commercial channel. Although group revenue fell year on year, sales of Thorntons’ branded products increased across all channels.

“Going forward we will continue to focus on reducing our dependency on Christmas by investing in products that drive sales in the traditionally quieter summer months. We therefore expect to be able to continue to improve our performance in the second half, which is historically loss-making,” says Mike Davies, chief executive of Thorntons.

Paul Polman, chief executive of Unilever.

Interim Profit Jump at Thorntons UK confectionery maker and retailer Thorntons increased profit before tax by 24.6% to £9.1m on sales down by 0.7% to £127.4m for the first half ended January 9th 2010. The significant improvement in profitability was chiefly due to reduced levels of discounting in

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

Driven by gains in its worldwide snacks and international beverage businesses, investments in value and innovation in key markets and cost discipline across its operations, PepsiCo has reported a 16% rise in operating profit to $8.04b for 2009 on flat net revenue of $43.23b.

Net income also advanced 16% to $5.98b.

“In 2009, strong execution of PepsiCo’s operational priorities enabled us to deliver healthy revenue and profit growth and generate strong cash flow, despite the macroeconomic challenges across much of the world,” says Indra Nooyi, chairman and chief executive of PepsiCo. “In 2010, we are changing the rules of the game in North America beverages 5

N N E E W W S S through the anticipated merger with our anchor bottlers coupled with the continuing activities to refresh our core brands.

We are extending our global leadership in snacks by continuing to innovate with new products and platforms, and by accelerating our growth in developing markets. We will accelerate our commitment across all our product categories to build a more balanced and healthier portfolio of enjoyable and wholesome foods and beverages – using science-based innovation to improve our existing portfolio and create new platforms.”

On a reported basis, PepsiCo’s European business increased operating profit by 2% to $932m on net revenue down by 2% to $6.73b.

Excluding the impact of restructuring and impairment charges and foreign currency translation, Europe delivered strong 2009 full-year results in a particularly difficult macroeconomic environment, growing net revenue 10% and core operating profit 13%. Acquisitions contributed 8% to net revenue growth and 5% to core operating profit growth in the full year.

Indra Nooyi, chairman and chief executive of PepsiCo.

BREWING & DISTILLING

Challenging First Half For Diageo With its standard brands outperforming its premium brands as consumers traded down, Diageo has reported a slight decrease in pre-tax profit of £13m to £1.39b in the six 6

months ended December 31st last on net sales ahead by 3% to £5.21b. Operating profit during the period dropped by 6% to £1.54b.

An improvement in the second quarter resulted in organic net sales slipping by 2% and organic operating profit by 3% for the half. However, Diageo has maintained its guidance for low single digit organic operating profit growth for the full year.

Exceptional operating costs amounted to £95m comprising £21m in respect of the global restructuring programme, £69m for the restructuring of global supply operations and £5m relating to the restructuring of the Irish brewing operations.

“As we had anticipated this was a challenging six months.

The economic and consumer environment remained weak in many markets,” points out Paul Walsh, chief executive of Diageo. “We are in the early stages of recovery with more encouraging signs in the emerging and developing markets.

However, in a difficult environment this half we have continued to improve the efficiency of our functions, reduced our cost base, strengthened our relationships with our customers and generated significant free cash flow which has again enhanced our financial strength. Focused marketing spend by category and geography continues to build our brand equities.”

In Europe, share gains in key markets and on key brands were not enough to offset continued industry declines in Ireland, Spain and Eastern Europe and net sales dropped 5%. A strong performance in Great Britain, where volume and net sales rose 6% and 5% respectively, allowed Diageo to increase share across total spirits, beer and wine. The Guinness brand again grew its share of the beer markets in Ireland and Great Britain. In Spain, overall industry decline and a consumer shift from the on-trade to the offtrade led to a net sales decline of 11%. The brand range was expanded and smaller bottle sizes introduced in Russia to capture new volume growth

B B R R II E E F F opportunities as consumers traded down to lower price points.

In Eastern Europe the economic environment continued to be very challenging leading to consumer down-trading and further stock reductions with customers. However, Southern Europe delivered net sales growth in the first half, led by Greece and Turkey.

Paul Walsh, chief executive of Diageo.

Carlsberg Attains its Goals Helped by acquisitions, Carlsberg increased operating profit from DKr8.0b to DKr9.4b (Eur1.3b) in 2009 on net revenue down by 1% to DKr54.9b. However, excluding currency impact, total net revenue would have increased by 6% in 2009.

The Danish brewer’s beer volume rose by 6% to 116m hectolitres, although this respresented an organic decline of 4% with net acquisitions contributing 10%. Throughout the year Asian volumes continued to exhibit high single-digit growth rates but Eastern Europe and Northern and Western Europe volumes declined organically by mid-single-digit rates.

Carlsberg’s group operating margin increased from 13.3% to 15.8% and net profit from DKr2.6b to DKr3.6b in 2009.

Driven by the intense and structured focus on cash flow improvements throughout the group, free cash flow was exceptionally strong at DKr10.5b.

Higher profits, lower capital expenditures and a significant year on year improvement in working capital were the main reasons behind this. Of the DKr1.3b synergy target related to the Scottish & Newcastle acquisition, about DKr970m of

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

annualised savings had been achieved by the end of 2009.

In the important Russian market that declined by around 10% in 2009, Carlsberg improved its market share from 38.8% to 40.6%. Due to the 200% increase in excise duties from the start of this year, Carlsberg expects the Russian beer market to show a low double-digit decline in 2010 but anticipates that it will continue to outperform the market.

Indeed, the Russian situation is expected to negatively impact Carlsberg’s 2010 operating profit by DKr300m.

For 2010 Carlsberg expects operating profit to be in line with that reported for 2009 and net profit growth of more than 20%. Carlsberg has set new medium-term (3-5 years) operating margin targets of 15-17% for Northern & Western Europe (previously 14-16%); 26-29% for Eastern Europe (previously 23-25%); with new targets of 15-20% for Asia and about 20% for the Carlsberg Group.

“2009 was a challenging year for Carlsberg and the global brewing industry. The global economy affected consumer behaviour negatively and overall beer market volumes declined.

While the Asian markets were less affected by the crisis, the Northern & Western European and, in particular, the Eastern European markets were materially impacted. Although consumers reduced their consumption, they remained loyal to their favourite brands leading to a positive price/mix across many markets. This occurred despite the negative channel mix from on-trade to off-trade,” explains Jorgen Buhl Rasmussen, chief executive of Carlsberg.

“Carlsberg was well prepared entering 2009. In late 2008 and early 2009 the group implemented and accelerated numerous efficiency improvement initiatives to protect earnings and improve cash flow and as a result was able to mitigate the impact from the declining markets. Carlsberg delivered a strong operating profit improvement, improved overall market shares and delivered a very sub-

N E W S stantial free cash flow improvement.”

For 2010 profitable market share growth through accelerated initiatives on brands and innovations will be a top priority for Carlsberg as well as continuing its focus on efficiency improvements. “While we expect consumer dynamics to be challenging in 2010, we also see many opportunities to strengthen our position in key markets,” he remarks.

Jorgen Buhl Rasmussen, chief executive of Carlsberg.

Heineken Achieves 18% Organic Profit Growth Although consolidated beer volumes fell 0.5% to 125.1m hectolitres, Heineken increased net profit by 4.1% to Eur1.06b in 2009 on revenue up 2.7% to Eur14.7b as higher selling prices and cost reductions offset lower beer consumption due to the global economic downturn. Heineken achieved net organic profit growth of 18% despite an organic revenue decline of 0.2%.

Heineken’s Total Cost Management (TMC) programme contributed to the performance and is on track to achieve pre-tax savings of Eur155m in its first year.

“In one of the most challenging trading environments ever witnessed in our industry, we have delivered an outstanding financial performance, transformed our platform for future growth and built a more competitive business. The international spread of our assets continues to be a competitive strength in the recession with all regions contributing to a strong 14% rise in organic EBIT growth,” says JeanFrancois van Boxmeer, chair-

B R I E F man and chief executive of Heineken. “Strong pricing delivered stable revenues that compensated for lower volumes. Once again, the Heineken brand outperformed the total portfolio, proving its strategic value to our business.”

Heineken has also taken significant steps to improve its future prospects. The intended acquisition of FEMSA Cerveza and the new partnership with United Breweries in India have increased exposure to fast growing, developing markets.

These agreements together with Heineken’s new, fully operational brewery in South Africa will significantly enhance Heineken’s growth profile.

Jean-Francois van Boxmeer expects the global economic environment will continue to lead to lower beer consumption and down-trading in a number of regions in 2010. The fall in raw material costs per hectolitre due to a temporary decline in the price of brewing barley is expected to be offset by higher energy costs, rising advertising rates and increased marketing costs. Capital expenditures related to property, plants and equipment will be kept broadly in line with 2009 at Eur700m.

Jean-Francois van Boxmeer, chairman and chief executive of Heineken.

Profit and Sales Fall at Pernod Ricard Flat organic growth, an 8% negative foreign exchange effect and a 2% group restructuring impact left profit from recurring operations down 11% to Eur1.06b in the first half ending December 31st last at Pernod Ricard. The operating margin declined by 40bps to 28% but at constant foreign exchange rates would have grown by 90bps to 29.3%.

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

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N N E E W W S S First half consolidated net sales at the French drinks giant fell by 10% to Eur3.79b.

In Europe, profit from recurring operations fell by 18%, with a 5% organic decline, reflecting a difficult situation overall, in particular in Spain, the UK and Ireland. Sales recovered in the second quarter in Russia and Ukraine. In France, profit from recurring operations grew by 5%, due to the performance of Ricard, Absolut, Chivas and Havana Club.

Pernod Ricard has confirmed its guidance for organic growth of 1% to 3% in profit from recurring operations for the full year.

fell from £8.0m to £5.1m.

Raisio Group’s main business areas are branded food products and functional food ingredients, as well as feed and malt. It has several strong consumer brands in its food business and employs more than 600 employees in nine countries.

Scotch Whisky Brands Change Hands

MERGERS & ACQUISITIONS

Raisio Acquiring Glisten Finnish food group Raisio, famous for the cholesterolreducing Benecol brand, is acquiring 85% of Glisten, the UK-based healthy snacks and confectionery group, for £19.8m, to expand its international business. The Glisten management team (comprising Paul Simmonds and Robert Davies) will retain the remaining 15% of the company.

Headquartered near Leeds, in Northern England, Glisten employs more than 650 people across ten UK sites. Glisten reported a pre-tax loss of £746,000 following exceptional items of £4.1m for the twelve months to June 30th 2009, compared to a pre-tax profit of £2.7m in previous year. Sales rose 1% to £74.4m but operating profit before exceptionals 8

forma basis, the addition of Kettle Foods adds more than $250m in revenues and almost doubles Diamond’s EBITDA. “While Diamond Foods has a long history of international sales, Kettle’s strong retail and operational foundation in the United Kingdom offers Diamond a platform, led by Kettle Chips, for expanding in the UK and Europe,” points out Jeremy Bradley, managing director of Kettle's UK business.

Coca-Cola Enterprises to Refocus on Europe

Matti Rihko, chief executive of Raisio.

Pierre Pringuet, chief executive of Pernod Ricard.

B B R R II E E F F

Scottish spirits group Edrington is acquiring the Cutty Sark blended Scotch whisky brand from Berry Bros & Rudd, the British wines and spirits merchant. Under the deal, BB&R will acquire The Glenrothes single malt Scotch whisky brand from Edrington, which has signed long-term supply agreements to provide whisky fillings and stocks to BB&R. Edrington will retain ownership of The Glenrothes distillery.

The transaction will also involve Edrington acquiring all distribution contracts on Cutty Sark. Maxxium, Edrington’sales and distribution alliance, will continue to distribute The Glenrothes in key international markets and is also expected to provide a distribution option for other brands within BB&R’s super-premium spirits portfolio.

The deal is due to be concluded

by April 2010 but the price has not been disclosed price.

Lion Capital Sells Kettle Foods Private equity firm Lion Capital has sold its Kettle Foods premium potato chips business in the US and the UK to Diamond Foods, the US-based snacks company, for $615m. Kettle Foods pioneered the kettlecooked crisps style in 1982 and operates in the two largest potato chip markets in the world, the US and the UK. On a pro

Following the sale of its North American bottling operations to Coca-Cola and the acquisition of Coca-Cola’s bottling business in Norway and Sweden for $822m in a cashless deal worth $15b, Coca-Cola Enterprises is now focused on the European market. CCE has also obtained the right to acquire Coca-Cola’s 83% stake in its German bottling operations within the next three years for fair value.

The acquisition of CCE’s North American operations means that Coca-Cola takes direct control over 90% of its total North American volume.

Coca-Cola already had a 34% equity stake in CCE. The refocused CCE will become the third largest bottler of CocaCola products in the world, having previously been the number one.

“CCE remains the preeminent Western European bottler and a key strategic partner with The Coca-Cola Company. Our European business serves an attractive market with growing volumes and profit driven by rising per capita consumption.

As such, CCE will have an improved profile with enhanced revenue, margins and EPS growth prospects,” explains John Brock, chairman and chief executive of Coca-Cola Enterprises. “Together with The Coca-Cola Company, we will continue to improve the effectiveness of our operations in our expanded presence in Europe.

These actions strengthen our ability to compete effectively and sustainably in Europe and represent the beginning of an exciting new era of long-term

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

growth for CCE's business and shareowners.”

A combination of solid volume and pricing growth enabled CCE’s European business to achieve a third consecutive year of profit growth in 2009. For the full year, comparable volume grew 5.5%, with continental Europe growth of 5% and growth in Great Britain of 6%. A key growth factor is the ongoing success of CocaCola Zero and the company’s Red, Black, and Silver initiative.

“Europe continues to deliver outstanding results,” says John Brock said. “To build on this progress, it is vital that we continue to focus on core sparkling beverages, improve our overall still beverage portfolio, strengthen customer service amid a rapidly changing commercial environment, and further enhance our effectiveness and efficiency.”

For 2010, CCE expects mid single-digit growth in both operating income and revenue in Europe.

Muhtar Kent (right), president and chief executive of Coca-Cola, and John Brock, chairman and chief executive of Coca-Cola Enterprises.

Pernod Ricard Sells Nordic Brands to Altia Pernod Ricard is selling a number of Danish and Swedish assets to Altia, the State-owned Finnish drinks group, for Eur82m. The deal includes a number of local wine and spirits brands including Explorer vodka, Lord Calver whisky and Blossa glogg, along with a bottling facility and a logistics centre in Denmark and a Swedish logistic facility. The disposal brings the French spirits and wine giant closer to achieving its Eur1b disposal plan, with Eur0.8b of assets sold so far.

N E W S

B R I E F

BAKERY

Glocken Backerei Opens New €80m German Bakery Glocken Backerei, a production subsidiary of German retail giant Rewe Group, has officially commenced production at its new Eur80m bakery at Bergkirchen near Dachau. Processing 36,000 tonnes of flour a year and supplying packaged and bulk goods to more than 1,100 Rewe stores and Penny discounters, the new 30,000 sq m facility is one of the most modern industrial bakeries in Germany.

The new site sets new standards for stateof-the-art production technologies as well as for environmental protection, and energy consumption is 40% lower than conventional industrial bakeries.

The 400 employees in Bergkirchen are producing 400,000 rolls, 120,000 loaves of bread, 100,000 ciabatta loaves, 80,000 baguettes, 100,000 loaves of toast bread and more every day during the three-shift operation.

With annual sales of Eur160m Glocken Backerei is one of the largest bakers in Germany. “Bergkirchen doubles our capacity. This is the foundation which will enable us to remain on a course of expansion,” says Guido Siebenmorgen, managing director of the production facilities of Rewe Group.

Processing 36,000 tonnes of flour a year and supplying packaged and bulk goods to more than 1,100 Rewe stores and Penny discounters, the new Eur80m bakery at Bergkirchen is one of the most modern industrial bakeries in Germany.

Net Profit Up at Lotus Bakeries Lotus Bakeries, the Belgium-based biscuit and cake producer, has reported an increase in net profit from Eur20.2m to Eur25.2m for 2009, reflecting a capital gain on the sale of its shares in Harry’s Benelux, and amounts written off on the interest hedges entered into in 2008. Operating profit rose slightly from Eur34m to Eur34.6m for 2009. Consolidated turnover grew by almost 2% during 2009 to Eur261.1 million. On a comparative basis, taking account of the takeover of Anna’s, the divestment of Harry’s Benelux and falling sales of Jaffa Cake Bars with the expiry of

the contract with McVities, turnover in 2009 was stable compared with 2008.

Since July 2009, Lotus Bakeries Group has been divided into seven different regions: Belgium, the Netherlands, France, North-Eastern Europe, North America, UK and export. Capital expenditure was in line with 2008, consisting mainly of investments in capacity extensions and innovation in the gingerbread bakeries in Sint-Johannesga and Geldrop, the Pepparkakor factory in Tyreso and the cake factory in Oostakker.

Warburtons to Invest £25m in New Bread Plant UK bakery group Warburton’s plans to invest £25m in a new state-of-the-art bread plant at its Hereford Street bakery in Bolton. However, the new plant will replace two existing lines and result in the loss of 120 jobs, more than a quarter of the site’s current workforce. Warburtons achieved pre-tax profits of £31.8m on sales of £498m in the year ending September 27th 2009.

A Step Forward For Sugars Free Confectionery ertain food categories have been C banned from school vending machines and consumers in their daily environment are exposed to healthy eating campaigns (such as 5-a-day and change4life in the UK). As a result, consumers have become more conscious about nutrition, with four in ten adults avoiding fats or sugars (Mintel report, Confectionery UK of June 2009). This environment brings stronger competition for sugar confectionery products in particular.

The sugars free segment is well established in chewing gums, but in the sugar confectionery segment it is still somewhat limited, and could see further growth, for example in the portion control positioning (eg 100 calorie packs). This development is possible only if the indulgence main buying purpose - can be kept while removing the sugars.

SYRAL is a leading European producer of sorbitol and maltitol, low caloric bulk sweeteners, which have organoleptic assets, and are also promoted for their toothfriendly properties. Maltitol in particular is interesting for its taste profile and rheology, which are quite close to those of sucrose. SYRAL has investigated the opportunities to formulate different types of stable sugars free confectionery with excellent organoleptic properties, and has evaluated cost reduction strategies in this segment.

Getting Your Teeth into Sugars Free Chewy Candies The pleasure of chewy candies mostly belongs to their nice chewy texture,

derived from their emulsion-foam structure. Stickiness is also an important and 10

challenging parameter when reformulating, especially when the product has an elaborated packaging. SYRAL’s application lab developed a sugars free chewy candy using maltitol Maltilite® without modifying production process and equipment. Sucrose and glucose syrup were replaced by a combination of maltitol powder (Maltilite® P200) and maltitol syrup (Maltilite® 5575). Including 5% of maltodextrin MaldexTM 120 in the recipe improved the overall texture, stability and processability. Thus, a stable chewy candy with excellent organoleptic properties was produced. The sweetening profile of maltitol, close to that of sucrose, imparts a very pleasant taste perception as acknowledged by the tasting panel, who did not perceive any difference between test and reference.

Marshmallows: All Sweetness and Light Marshmallow is another type of aerated confectionery. Maintaining proper chewiness, low stickiness and good stability in sugars free marshmallows was a challenge for SYRAL’s application lab which again used maltitol to address the technical issue.

Liquid maltitol Maltilite® 5575 in combination with Maltilite® P200 were used to replace the usual glucose syrup and sucrose of the reference product. The amount of gelatine did not have to be adjusted and production process remained the same. Chewiness of the tested sugars free product was found to be quite close to that of reference sugars products from the market, even closer than other sugars free products already on the market.

The same pattern is observed on stickiness.

For the coating of the sugars free version of the product, SYRAL found that Maltilite® P200 allowed optimal coating stability. Its fine granulometry ensures the nice melting in mouth.

Maltitol in Sugars Free Hard-boiled Candies: A Cost Reduction Opportunity Together with tablets and jelly sweets, hard-boiled candy is a major confecFOOD & DRINK BUSINESS EUROPE, MARCH 2010

tionery segment for sugars free products.

SYRAL worked on cost-optimisation of a standard sugars free formulation of hard boiled candy, by replacing part of isomalt by maltitol. SYRAL fine-tuned the maltitol/isomalt ratio so that hygroscopicity could remain under a critical level, ensuring shelf life and preventing stickiness.

For wrapped candies, SYRAL tested and recommends Maltilite® 5575 at a ratio of 40% of maltitol syrup versus 60% of iso-

malt powder. Hygroscopicity of this product at 30°C and 70% of relative humidity is satisfactory over time, being even better than a reference with glucose syrup and sucrose. This ingredient combination enables a reduction of raw materials cost up to 15% compared to 100% isomalt. No specific equipment or process adjustment is required, because viscosity of the syrup after cooking is very close to the standard version.

Conclusion Starch-based ingredients produced from cereals allow many opportunities in sugars free confectionery developments.

SYRAL’s innovation team validated the use of maltitol not only in chewy candies, marshmallows and hard boiled candies, but also in jellies, wine gums, chewing gums, tablets and chocolate.

Food manufacturers looking for partnership on product development and optimisation will be glad to know that SYRAL inaugurated in 2009 its new Application Centre - 1,300 square metres of state-of-the-art pilot and analytical equipment. The customer technical support team is available to help bringing the expertise from the lab to the production line.

For further information contact Susanne Roelle, Customer Technical Support, at Susanne.roelle@syral.com. J

COVER STORY

Greencore Completes Refocus on Convenience Foods Following the recent disposal of its bottled water and malting operations, Greencore has completed its long transition from an agribusiness into a fully focused convenience foods processor. By Mike Rohan.

D

ublin-based Greencore is one of the leading convenience foods manufacturers in the UK, with strong positions across a wide array of sectors including sandwiches, chilled prepared meals, chilled soups and sauces, ambient sauces and pickles, cakes and desserts, and Yorkshire puddings. It is also developing internationally since venturing into the North American market in 2008, where it now has fast growing convenience food businesses.

Last November, Greencore announced the sale of its bottled water business to Highland Spring, the UK’s largest bottled water supplier, for up to £17.5 million (Eur19.6 million) – see ‘Fresh Source of Growth For Highland Spring’ in Food & Drink Business Europe, December/January 2010 issue. Greencore Water is a supplier of customer branded water in the UK, operating from two facilities located at Campsie Springs in west Scotland and Blaen Twyni in Wales. The deal is expected to be completed before the end of April 2010. €116m Malt Business Disposal Greencore is now selling its malt business to French co-operative group AxerealUnion De Cooperatives Agricoles for up to Eur116.3 million. Greencore Malt principally comprises three malting businesses – UK-based Pauls Malt, Minch Malt in Ireland and Belgomalt of Belgium. It is a leading European malting business with seven malting plants, which have a combined annual output capacity of approximately 520,000 tonnes. For the year ending September 25th 2009, the business being sold had operating profit of Eur20.5 million on revenue of Eur217.2 million and gross assets of Eur144.7 million. Completion of the disposal is expected later this month.

Net proceeds from the disposal will be used to reduce Greencore’s net debt, which stood at Eur283.8 million on 25th September 2009, by about 32%.

“The transaction completes Greencore’s journey into a focused convenience foods player, with clear leadership positions in the UK market and a growing The Greencore culture is centred on operational regional presence in excellence and a rigid focus on the cost base as a North America,” key driver of profit growth. Sauce preparation at points out Patrick Greencore.

Coveney, chief execu-

tive of Greencore.

“Looking ahead, this deal will tighten our strategic focus, strengthen our balance sheet and provide capital to fund future growth over time in both our UK and US convenience foods markets.”

Evolution Established in 1991 through a flotation of the state-owned Irish Sugar Corpor-ation by the Irish Government, Greencore has, Greencore is one of the leading convenience foods through a series of manufacturers in the UK, with strong positions acquisitions and dis- across a wide array of sectors including posals and organic sandwiches, chilled prepared meals, chilled soups growth, been trans- and sauces, ambient sauces and pickles, cakes formed from an Irish and desserts, and Yorkshire puddings. agribusiness with food operations into a fully-fledged international convenience food processor. The process was accelerated in 2001 when the acquisition of Hazlewood Foods for £350 million changed Greencore from being chiefly dependent on sugar processing in Ireland into one of the UK’s leading convenience food businesses.

The transition was exemplified by the importance of sugar and sandwiches within the group’s product portfolio. Until the acquisition of Hazlewood Foods, sugar had been the traditional main driver of Greencore’s profitabilty and provided the resources for the group’s expansion into convenience foods. However, following the acquisition and subsequent integration of Hazlewood Foods, sandwiches became the star performer.

Since the Hazlewood Foods acquisition, Greencore has been disposing of non-core assets to reduce debt and concentrate resources on fast growing convenience food categories where the company has strong market positions.

Patrick Coveney, chief executive of Greencore.

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

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The rationalisation of the Hazlewood business was largely completed in 2004 with the sale of Rathbones Bakeries for Eur30 million as Greencore withdrew from the UK bread market.

In the same year, Greencore combined its the chilled foods and ambient and frozen divisions to create a single convenience food business in order to facilitate a more focused appNed Sullivan, chairman of Greencore. roach and the adoption of a common culture and way of operating across all food business units. The Greencore culture is centred on operational excellence and a rigid focus on the cost base as a key driver of profit growth. Indeed, Greencore’s aim is for its operations to be distinguished as the most cost efficient in their particular market sectors.

Greencore’s two sugar processing sites in Ireland were closed between 2005 and 2006 following the handing back of Ireland’s entire sugar quota under the reformed EU sugar market regime.

Greencore finally completed its withdrawal from the Irish sugar market in 2009 when it sold its 50% stake in Sugarpartners, a sugar import and distribution joint venture with Nordzucker, for an undisclosed price.

Financial Performance Greencore reported a 7.9% increase in operating profit to Eur72.9 million from continuing businesses on a constant currency basis on sales down by 0.8% to Eur1.1 billion for the year ended 25th September 2009. However, a 13% decline in average Eur/£ exchange rates versus the previous financial year impacted translation of operating profit by Eur9.1m, leaving it 5.7% down on the 2008 figure.

Profit before tax, exceptional items, pension financing and market to market items was Eur43.4m compared to Eur50.0m in 2008. Greencore incurred a net exceptional loss of Eur25.2m on discontinued activities and restructuring initiatives. During the year, Greencore also successfully refinanced Eur410m of banking facilities.

Greencore’s convenience foods business, which accounted for 64% of group operating profit, delivered a strong performance during the year. Operating profit from continuing businesses increased by 14.1% on a constant currency basis to Eur46.4m and was in line with the previous financial year after the impact of currency translation. Sales in continuing businesses of Eur794.4m increased by 2.2% on a constant currency basis but decreased by 9.4% after the impact of currency translation. The operating margin increased by 50 bps to 5.8%, chiefly reflecting cost saving and restructuring initiatives.

Rollercoaster Year “2009 was a ‘rollercoaster year’ in our core convenience foods markets,” comments Patrick Coveney. “The year began with very fragile consumer confidence and dramatic swings in volumes week-on-week – reflecting shoppers seeking value everywhere, consumers retrenching to ‘at home’ eating, and

significant increases in promotional activity across our customer base. These effects impacted across our group but caused most difficulty at our food to go businesses. In response, we worked very hard to put in place new ‘value ranges’ and tweaked our operational model to prosper in an era of increased promotional intensity.”

However, stability and modest growth returned to most of Greencore’s convenience foods categories in the second half.

“While of course taste matters, and value is important too, the underlying demand of consumers and retailers for ever more convenient food offerings remains in place,” he adds.

The difficult trading environment also resulted in significant industry restructuring in the UK with several smaller players unable to compete. “Larger players have become more discerning in their use of capacity and for the first time in a decade we have seen capacity contraction in each of our large categories. This tightening of the market, when allied to recovering consumer demand that began to feed through in the second half of the year, provides a platform for more sustainable returns in the coming years,” he remarks.

Development Strategy During the past year Greencore has also restructured its food business, exiting frozen desserts, disposing of the water and malting businesses, and developing its US manufacturing sites. “We have reshaped our portfolio, consistent with a UK and US convenience foods strategy,” explains Patrick Coveney.

The Greencore chief executive continues: “Our strategy is surprisingly simple – to win in convenience foods. Underpinning this strategy are three ideas. We believe that consumers and retailers will continue to search out and pay for ever more convenient food offerings – the product form will change but the need will not! We have distinctive capabilities in convenience foods – there is 'stuff' that we can do that nobody else can. Furthermore, we can keep getting better and while doing so we can transfer those skills from mature businesses to emerging businesses. In geographic terms we will focus our efforts on leading in the UK and in selective regions of the US.” Growth Prospects Greencore has started its current financial year well with year on year growth in both sales and operating profit by most of its food category businesses. Sales at Eur220.2 million during the first quarter are 6.5% ahead of the corresponding period of 2009 on a constant currency basis. UK sales, excluding water, are 7.8% ahead with strong year on year growth exhibited by the food-togo and prepared meals categories. First quarter US sales are 30% up, driven by consumer take up of the group’s fresh food offering.

“Additionally, we continue to build on the progress made in FY 09 of increasing operating margins in convenience foods to more acceptable levels,” says Ned Sullivan, chairman of Greencore.

Greencore has a well capitalised balance sheet having secured a new three year bank debt facility of Eur360 million with a group of international banks in April 2009 and concluded a new two year bi lateral facility of Eur50 million the following August. “This refinancing, a significant component of which is undrawn, provides the group with the capacity for future growth.” Ned Sullivan continues: “It is still early in the financial year and although encouraged by our recent trading performance we remain appropriately cautious about the consumer environment for the remainder of the year.” J

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

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FOOD & DRINK BUSINESS EUROPE, MARCH 2010

Ready Egg Products is a major player in the egg ingredients industry, focused on supplying the highest-quality egg ingredients to food manufacturers and outstanding egg products to foodservice companies in both the UK and Ireland.

Liquid Egg • Operating from state of the art processing facilities, we produce customized liquid egg products of both cage or free-range variety, for the food ingredient industry, including the baking, mayonnaise, sauces, dairy and confectionary industries, just to name a few.

• Our products can be packaged in bag-in-box format (5/10/15 KGS) for convenience and flexibility, or alternatively, in pallecon containers (500/1000l) where greater volumes are required.

• By controlling every step in egg production and processing through our vertically-integrated and inline process, we assure our customers the freshest products.

• Our close attention to product quality with strong customer service ensures consistent and satisfying results for every egg product we make and every customer we serve. By focusing more on unique custom blends, we aim to help our customers reduce their preparation time even further, adding value to their businesses.

Boiled Egg • Our recent investment in a modern boiling plant allows us now to produce 40,000 de-shelled boiled eggs per hour which can be packaged according to our customers need in both pail and pouch formats. Our boiled product is available in both cage and freerange varieties.

Ready Egg Products Ltd. Manor Waterhouse Farm Lisnaskea Co Fermanagh BT92 0BN Tel: 028 67721345 Fax: 028 67721655

I EGG PRODUCTS

Ready Egg Products Set to Crack New Markets Armed with a £6 million state-of-the-art processing plant supplying liquid egg products and peeled hard boiled eggs, including free range, to the food manufacturing and food service industries in both Ireland and the UK, Northern Irelandbased Ready Egg Products is accelerating its market growth in Great Britain.

By Mike Rohan. o further exploit market opportuni- Ready Egg Products employs about 60 peo- for food service customers. ties in Great Britain, Ready Egg ple and has a current annual turnover of The customer base includes bakers, sandProducts is currently investing a £15 million. wich manufacturers and convenience food further £1.5 million to develop and processors in Ireland and Great Britain. launch fortified liquid egg blends, devel- Product Range About 60% of sales are currently generated oped to match the precise processing Ready Egg Products supplies liquid egg, in Great Britain and this proportion of the requirements of food manufacturers and including egg whites and yolks, as well as business will continue to grow rapidly as food service operators. The new products whole hard boiled eggs. The company’s Ready Egg Products increases market peneare expected to be introduced in June of long-life products have a shelf life of 34 tration and wins new orders for its expandthis year. The innovative company is also days compared to 10 days for its short-life ing range of products. increasing its output of free range egg prod- range. Products are available in bulk, from ucts to meet growing market demand. As a 28 ton tanker loads down to 1 ton or 500 North-South Collaboration vertically integrated business, covering egg kilo pallecons. Bag-in-box packaging for- Ready Egg Products is a joint venture production and processing, Ready Egg mats in 5, 10 and 15 kilo sizes are available between two egg companies from Southern Products provides customers with fully traceable products, and in the case of free range eggs, a guarantee of authenticity.

Ready Egg Products is situated at Manor Waterhouse Farm, near Lisnaskea in County Fermanagh, a region noted for food production, especially poultry and eggs.

The enterprising company has a high quality supply of shell eggs for processing at its highly automated and computerised plant, which is accredited to global food safety standard (BRC issue 5) and is also approved by Marks & Spencer.

The plant can produce 200 tonnes per week of liquid eggs and peeled, hardboiled eggs, which are delivered daily to food processors and food service customers throughout Great Britain and Ireland. Sophisticated pasteurisation technology allows the facility to cus- Co-located at the Erne Eggs site in County Fermanagh, the Ready Egg Products plant can produce 200 tonnes per week of tomise liquid egg mixes to liquid eggs and peeled, hard-boiled eggs, which are delivered daily to food processors and food service customers throughout customer requirements. Great Britain and Ireland.

T

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

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McCulla (Ireland) Ltd Blaris Industrial Estate, Old Hillsborough Road, Lisburn, BT27 5QB

Tel: +44 (0)28 9267 2211 Fax: +44 (0)28 9263 3650 E-mail: contactus@mcculla.co.uk

and successful companies in egg production and creates a critical mass for accelerated growth in terms of existing products and for developing new ideas,” says Charles Crawford.

Ready Egg Products supplies liquid egg, including egg whites and yolks, as well as whole hard boiled eggs.

Highly Advanced The Ready Egg Products plant is technologically advanced. “Because the plant dates from 2004 with some elements added in 2009 and 2010, it is one of the most modern plants of its type in Europe,” he points out. “It is totally computerised and we receive visitors from all over the world to see it.”

Charles Crawford has always been willing to embrace new technology to enhance product quality and the efficiency of his business. Having founded Erne Eggs on the family farm in the mid-1970s and rapidly establishing it as the largest egg producer in Ireland, with 420,000 birds by 1982, he was the first in Ireland to introduce an automated in-line packing system for handling all eggs from the hen houses.

The Ready Egg Products processing plant is fed directly by the automated Erne Eggs production operation, which has an output of 2.1 million eggs a week.

Ireland - Greenfield Foods and Irish Egg Products - and one from the North – Erne Ready Egg Products added hard boiled eggs to its product portfolio last year after investing £3 Eggs. Based in County Fermanagh, Erne million in a new fully automated plant capable of Eggs is the largest producer of shell eggs in producing 40,000 eggs per hour.

Northern Ireland, while County Monaghan-based Greenfield Foods holds a similar position in the Republic of Ireland. growing preference by consumers for free Irish Egg Products was a supplier of liquid range eggs. Some estimates suggest that the egg products and boiled eggs in the free range share of the UK egg market Republic of Ireland. Owning 50% of the could reach 55% by the end of 2011. “We equity, Erne Eggs is the major shareholder Focus on Great Britain see free range in all its forms – whole egg, in Ready Egg Products, with the other two Ready Egg Products is the largest supplier white and yolk or boiled egg – as a major partners each holding 25% of the joint ven- of egg products in the Irish market and is part of our strategy going forward. This ture. now seeking major growth overseas. “We will also be a major boost for egg producFormerly, Quality Egg Products, Ready have almost reached saturation point in ers, right across Ireland,” remarks Charles Egg Products was originally established in Ireland, supplying in excess of 80% of egg Crawford. Ready Egg Products is encourag2004 by Charles Crawford, who still heads usage, and so we are now concentrating on ing existing egg packers supplying the retail the business and is also managing director going over the water to Great Britain, market to produce more free range eggs by of Erne Eggs, as a logical means of adding where the opportunities are many and offering to purchase their surpluses. value to his shell eggs production business where we now rank in the top four,” says Indeed, the establishment of Ready Egg by moving into liquid egg. Following Billy Hamilton, sales and marketing man- Products has helped to restore stability to investment of about £3 million in a new ager, Ready Egg Products. the Irish egg market. “The egg industry in liquid egg processing plant, co-located at Indeed the egg usage of some large the North and South of Ireland can now the Erne Eggs site, the new company ini- English convenience food manufacturers is look to expansion because in the past a limtially supplied liquid egg products in larger than the entire Irish egg products iting factor to growth had been how to deal Northern Ireland with some sales in market. with production surpluses,” explains England. “We have always regarded eggs as Charles Crawford. “We now have a compaa commodity and saw processing as a Free Range Eggs ny that can take surpluses, turn them into means of adding value,” Charles Crawford Ready Egg Products is capitalising on the added value products and export them. The remarks.

Irish industry in my lifetime has Greenfield Foods and Irish Egg never been in that position.” Of Products came on board in 2007, procourse, the egg production industry viding additional raw material to in Ireland, as well as Great Britain, launch a major assault on the massive still has to adjust to the EU directive, market in Great Britain and also a well which bans conventional cages and established route to the liquid egg comes into effect on January 1st market in Southern Ireland.

2012.

Renamed Ready Egg Products following the joint venture, the company Product added hard boiled eggs to its product Development portfolio last year after investing £3 Ready Egg Products’ commitment million in a new fully automated plant to R&D is starting to pay divicapable of producing 40,000 eggs per dends with a series of new prodhour. ucts in the pipeline. “We are curBecause of its joint venture owners, rently developing blends and or Ready Egg Products is a vertically fortified products, which tend to integrated operation. “Our business is The Ready Egg Products processing plant is fed directly by the be more specialised egg white or based on the experience, expertise and automated Erne Eggs production operation, which has an output of yolk products with specific added market knowledge of three established 2.1 million eggs a week. ingredients, to assist the food manFOOD & DRINK BUSINESS EUROPE, MARCH 2010

21

ÂŽ

Advantis CIP P3-tsunami 100 Aquanta

www.ecolab.com

Š2010 Ecolab

Low temperature CIP programs Flume treatment in produce washing Crate and traywashing hygiene management systems

Eggs travel via the egg grading station by conveyor to the breaking room.

ufacturer with their processing activities.

We will be launching some of these products in the middle of this year.”

Charles Crawford elaborates: “Some large food processors are using egg white and egg yolk in their manufacturing processes but have been finding inconsistencies in the egg. This is costing them money and a certain degree of frustration because the manufacturing

The egg collection table at Ready Egg Products.

difficulties are resulting in wastage. We see this as a potential opportunity to produce a better and more consistent product. It is slightly specialist route to follow but if you are selling into Great Britain from Northern Ireland, you really need to look at what gives you an edge. Our new specialist products and our expanding free range production will give us this advantage.”

Promising Outlook Ready Egg Products is well placed to continue its rapid expansion into the egg products market in Great Britain. “The reality is that more and more consumers are eating processed food as lifestyle demands. The processed egg market will continue to grow and we will grow with it. We could be looking at 50% growth this year with these new products,” Charles Crawford concludes. J

I LOGISTICS

Temperature Controlled Storage and Distribution Services From McCulla cCulla is one of the UK’s leading third M party temperature controlled logistical service providers (3PL) into and out of Ireland from most parts of Western Europe. As well as having 9,500 tonnes of frozen and chilled storage in Lisburn, Northern Ireland, McCulla carries out order picking, blast freezing, tempering and repacking on a daily basis. All directives from customers are achieved within agreed KPIs. McCulla’s warehouse is one of the largest and most modern distribution centres in Ireland, with the ability to operate chambers from -25 C to +5 C.

Within the last twelve months the company has started providing a fourth party logistics (4PL) service to certain institutions.

Operating a modern fleet of over 50 tractor units and 85 multi–temperature articulated trailers, the McCulla fleet has an average age of less than 4.5 years. For inner city deliveries in Dublin and

Belfast McCulla operates a number of 18 and 23 ton multi-temperature rigids with tail lifts. Throughout Ireland the company has the ability to deliver to every corner of the island by the load, pallet or case. These vehicles deliver goods collected from Continental Europe and UK manufacturers as well as local products.

McCulla operates up-to-date systems within its total operation - warehouse management systems, customer website, scanned Pod’s and real-time vehicle tracking. J

BAG IN BOX TECHNOLOGY IS GREEN • Bag-in-box packaging for liquid egg is increasing in popularity • The format enables end users in markets such as fast food outlets, restaurants and hotels to use this technology in a much more efficient, intuitive manner bringing more flexibility than alternative packaging, which is an important point in an increasingly fast moving food industry.

• The format is very popular for many reasons; increased shelf life after opening being one important benefit • Converting to bag-in-box packaging also bring liquid egg manufacturers various other benefits.

• Such as Bag-in-box Liquid Egg is hygienically filled on an Aseptic Filler • The bags are irradiated to ensure the product is packed into a sterile packaging format • Bags are made @ barrier material resulting in an increased shelf life com-

pared to alternative packaging formats.

• Lightweight package (before and after filling), package flattens when empty, reducing waste.

• Cost effective, hygienic filling, transfer and dispensing.

• User-friendly dispense options.

• Bag-in-box packs has many environmental credentials – “bag-in-box is green” which is supported by a Life Cycle Assessment report completed

by PIRA • Transport and storage costs are significantly reduced compared to other packaging formats eg buckets or kegs BIB allows Better pallet efficiency than pails or canisters - saving space in the cold chain.

• BIB packs are available in 5,10 and 15 ltr sizes and also @ 1000 ltr bulk packs Web: www.rapak.com

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

23

GEA Grenco is the market leader in refrigeration installations for the food, non-food, process and marine industries. As part of the global technology group GEA, Grenco supplies customised total solutions, from advice and engineering, to the installation and maintenance of industrial cooling and refrigeration systems.

The Company aim to form partnerships with their customers, meeting all their refrigeration needs with the most energy efficient solutions and strive to be at the forefront of environmental and innovative technology.

GEA Grenco is one of 12 contracting and service companies within GEA Refrigeration, a division of GEA Group Aktiengesellschaft. GEA Refrigeration also includes various refrigeration equipment manufacturing companies such as Grasso, Goedhart, Kuba.

GEA Grenco Ltd. Suite 1, 40 Churchill Square, Kings Hill, West Malling, Kent ME 194YU Tel. +44 (0) 870 600 1200 Fax. +44 (0) 870 600 1201 email: sales.grenco.uk@geagroup.com www.grenco.co.uk

GEA Grenco – The Refrigeration Specialist ndustrial refrigeration specialist GEA Idesign, Grenco has successfully completed the manufacture and installation of the refrigeration space for the storage of dairy products at Culina SHS Ireland’s newly opened state-of-the-art ambient and chilled warehouse at Aerodrome Business Park, south of Dublin.

GEA Grenco designed the facility to meet the highest standards of sustainable environmental responsibility by minimising impact, through choice of materials, managed energy consumption and elimination of harmful emissions. In addition to delivering a highly efficient and reliable refrigeration plant with a 20 years plus life expectancy, GEA Grenco is also providing ongoing support to meet technical servicing requirements with tailored maintenance programs and skilled personnel.

GEA Grenco UK and Ireland is a major manufacturer, supplier and provider of industrial refrigeration services to a wide variety of industries throughout Ireland.

The company has a long history of serving both large and small client organisations with their refrigeration requirements.

With Irish offices based in Cavan, 24

County Cavan, Dublin and Naas, County Kildare, GEA Grenco is ideally suited to provide a comprehensive range of contracting and after market services.

These services include complete design and build packages, offering innovative solutions tailored to individual applications. GEA Grenco places great emphasis on interpreting its clients’ exact requirements in order to offer the most appropriate solutions. This strong design approach ensures the primary ‘client objectives’ are met in the most cost effective and practical manner.

In particular, GEA Grenco has many years of involvement with the FOOD & DRINK BUSINESS EUROPE, MARCH 2010

cold storage industry, from large facilities to small independent cold stores, and recognises that refrigeration is an important factor in all stages of manufacture, storage and distribution of food products.

GEA Grenco offers a range of products specifically designed for these applications including cold and chilled storage, cross docking facilities, process area air conditioning, blast freezing and chilling tunnels, plate freezing and scraped surface heat exchangers. J

Culina SHS Offers New Logistics Solution in Ireland ood and drink manufacturers can now F take advantage of a new supply chain solution across Ireland that has been launched in a joint venture between the Culina Group and the SHS Group.

Operating under the Culina SHS Ireland name, the company recently opened a new state-of-the-art ambient and chilled warehouse at Aerodrome Business Park, Rathcoole, County Dublin, which will provide food, drink and grocery manufacturers in Britain with a seamless supply chain solution covering the whole of Ireland.

Unique Challenge According to Thomas van Mourik, chief executive of the Culina Group, which is behind multi temperature supply chain specialist Culina Logistics, Ireland presents a unique distribution challenge.

“Manufacturers have long seen the potential in Ireland, but many have lacked the operational platform to take full advantage of the available opportunities,” he comments. “With the new operation we can effectively integrate Ireland into a one-stop supply chain solution, with all the strategic, tactical, commercial and operational benefits that such a move brings.”

Culina SHS will employ the same sophisticated warehouse management system (WMS) as featured throughout Culina’s UK operations, which ensure automatic stock replenishment and complete visibility of order status throughout the supply chain.

Now that its new 160,000 sq ft (14,850 sq m) chilled, ambient and TC facility is open, Culina SHS has the added advantage of offering a dynamic solution that draws on the vast skills, experiences and resources of both SHS and Culina Logistics.

Best in Class “This new joint venture with Culina underlines our commitment to best in class FMCG services in Ireland, and ensures we are well placed for future growth,” points out Michael Howard, managing director of SHS Group. “The new facility is a huge boost for our Ireland business, paving the way for increased capability for our existing customers and ensuring our sales and marketing proposition is attractive to new brand owners as well.”

Businesses in Ireland can also use the platform to distribute products into Britain and there are plans to extend services to and from Europe in the future.

One-stop Supply Chain Solution The Culina Group is focused on establishing a one-stop supply chain solution that can meet existing and future challenges

Thomas van Mourik, chief executive of the Culina Group.

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

faced by food, drink and grocery manufacturers and the changing demands of the retail sector. This is achieved through group companies Culina Logistics, Culina SHS Ireland and Culina IPS Contract Packing.

Culina Logistics is the leading provider of shared-user, end-to-end supply chain services for ambient and chilled food and drink companies in the UK and Ireland.

With over 90 household name food and drink manufacturer customers, with requirements varying from 400 to 2.5 million cases per week, Culina is continually striving to stay ahead of its competitors to ensure it delivers a service, which is measurably the best. Through the ongoing development and implementation of innovative supply chain solutions, Culina looks at ways to meet existing and future challenges faced by manufacturers that help provide them with a significant competitive edge in their respective marketplaces.

Culina Logistics has a turnover in excess of £150m, employs around 2,300 people, operates a fleet of over 250 vehicles and 550 trailers, and has a UK network of nine distribution centres.

In the last year, Culina has continued to invest in the development of added value, cost efficient and sustainable supply chain solutions. One of which is the joint venture with SHS Group to create Culina SHS Ireland.

Culina IPS Contract Packing is a joint venture with IPS (Contracting) LLP that specialises in contract-packing and re-working services using the latest technology and processes to deliver a unique customised solution.

SHS Group, the other partner in the new Irish joint venture, was established in 1975 and operates in the FMCG sector through 11 autonomous companies. It is privately owned company and employs over 700 people across the British Isles. J 25

PPD’s reputation has been built upon delivering successful projects worldwide. Our wealth of experience, knowledge and understanding of Food Manufacturing Operations, enables us to provide our clients with the following benefits:G A strategic partner that can provide experienced resource to support the client with the development of the Design Brief / Concept, through to the working solution.

Realising the “Vision” and helping to underpin the business strategy.

G A full understanding of the supply chain and retailer standards and expectations.

G Capacity and Process Modelling G Process and Spatial Layout Design G Facilitating problem solving workshops G Experienced resources for Project Design, Management, Engineering and Co-ordination of Project activities including the external Professional Design Team, Suppliers, and the Client’s Internal Project Team.

Pera Innovation Park, Nottingham Road, Melton Mowbray, Leicestershire, LE13 0PB Tel:01664503730 Email:- info@ppd-uk.co.uk www.ppd-uk.co.uk

I FROZEN FOODS

Ardo UK Consolidates With £16 Million Development Ardo UK is now prepared to meet the growing consumer demand for frozen foods while also improving cost competitiveness after consolidating its two UK operations into a single site at Charing in Kent, following investment of £16 million. ell known for its Ardo and Shearway brands, Ardo UK specialises in producing and packaging frozen fruit and vegetables, which are sourced and imported from throughout the world. The company has a turnover of about £50 million and is part of Belgium-based Ardo group.

Ardo UK was formed in 2004 following the merger of Ardo’s two British operations – Ardo Shearway and Ryan Foods. The merger of two highly complementary companies served to enhance the market standing of the combined business while also improving customer service.

W

Consolidation Ardo UK’s Charing site has now been expanded with the construction of a new state-of-the-art processing and packing hall for freezing and packing fruit, pasta, rice and vegetables for the retail trade and the food service industry. The new £16 million building also incorporates additional cold storage space to increase capacity to 20,000 pallet spaces, along with extra office space and employee facilities. The new development features ‘zero impact’ on the community building visibility and a green approach. For instance, the heat from the freezer cooling system is being used to generate hot water, yielding 15% savings in energy consumption.

The recently completed expansion at Charing has entailed the replacement of Ardo UK’s second site, located about 11 miles away at Headcorn in Kent. The

Ardo is Europe’s largest supplier of frozen fruit and vegetables.

Headcorn site had been used to take bulk materials, from Ardo’s European factories and globally, and repackage them into various customer packages and recipes for customers such as Tesco, Sainsbury and Waitrose. However, in line with the company’s ongoing quest to improve efficiency it was a natural step to consolidate operations into a single site equipped with state-of-theart facilities.

Low Cost Producer Consolidating its operations into a single site has streamlined the business and will enhance competitiveness. “This expansion on our existing site enables Ardo UK to meet its commercial aspirations while also helping the company to remain a low-cost producer, with that benefit passed on to our customers and to the consumer through continued competitive pricing,” explains Stephen Waugh, managing director of Ardo UK. “The redevelopment will result in additional versatility and flexibility to the Ardo UK operation, bringing on site the capacity not only to pack, but to handle new and unusual pack types, and it will mean far fewer lorry movements.”

In conjunction with developing the new £16 million facilities at Charing, Ardo UK has been improving the quality of its workforce by investing in training to up-skill its staff. “We believe that our staff provide the key to the future and, as such, we’ve employed a new human resource manager who will co-ordinate our investment in their skills,” he points out.

Ardo UK’s headquarters at Charing is an ideal operating base for both exporting to and importing from continental Europe and part of the expanded storage space has been made available for external customers.

Expanding Market The £16 million investment will help Ardo UK meet the increasing demand from consumers for freshfrozen vegetables and fruit, which is very evident in the deep freeze segment of the retail sector. This growth is being fuelled by factors such as stable prices, good availability and the growing consumer recognition of the

The £16 million investment will help Ardo UK meet the increasing demand from consumers for freshfrozen vegetables and fruit, which is very evident in the deep freeze segment of the retail sector.

quality aspects of deep freeze products.

Ardo UK’s parent group is Europe’s largest supplier of frozen fruit and vegetables with a turnover of Eur556 million in 2009. Ardo originated in the 1950s from a small family farming business, which was growing and trading vegetables near the village of Ardooie in Belgium. Ardo’s first vegetable freezing factory was built on the family farm in 1977 and the company took its name from the nearby village.

Ardo has since developed its production facilities and sales throughout Europe and now employs over 2,500 people globally.

The group operates 15 production sites across eight European countries. Each year Ardo sells over 500,000 tonnes of processed fresh-frozen vegetables, fruit, prepared vegetables, pasta, rice and herbs to customers in more than 50 countries around the world.

Ardo UK consolidated operations at its site in Charing, Kent.

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

27

I

CONSULTANCY SERVICES

Meller Food and Drink Solutions – Supporting Ardo UK Ltd Meller specialises in providing comprehensive consultancy services to the food and drink industry. With over 16 years of experience and over 600 food and drink schemes to its name Meller’s expertise is second to none.

Believing no project is too big or too small, Meller has delivered successful schemes ranging from small refurbishments and extension schemes through to £40 million new food factories and £60 million food distribution centres.

Experience Meller has extensive experience in all areas of the food and drink industry from fresh produce to dry goods, successfully working in sectors including bakery, sandwiches, desserts, ingredients, ready meals, dairies, soft drinks and brewing.

By offering a comprehensive package of inter-related services and expertise Meller is able to maximise cost effectiveness for its clients – an important consideration at a time when food and drink manufacturers are under pressure to optimise the benefits from capital expenditure projects.

Knowledge Meller is able to guide clients through the myriad of decisions required during a scheme by applying its cumulative knowledge and expertise of the food and drink industry. This was the role Meller undertook working with Ardo to deliver its cold store and production facility. By providing a fully comprehensive service Meller allowed Ardo to concentrate on running its business whilst ensuring the scheme fulfilled the brief and future requirements.

“Ardo was a great project to work on. Stephen and his team were totally involved in the development of the facility and communication was a key aspect in managing expectations,” explains director Colin Cox. “Working with a European architect was a process we had been through previously with our

The Ardo motto is ‘preserving the precious gift of nature’ and as a focused vegetable and fruit business its strategy is to be the best in three crucial areas – supply chain, quality and innovation.

Ardo’s goal is to maximise customer sat-

clients Nestlé, so it was important we applied some of the skills to ensure best practice.”

Since working with Ardo, Meller has become a member of the British Frozen Food Federation.

“The expertise we can deliver to cold store and chilled production facilities are extensive. What adds substantial benefit is to understand the sector and supporting their needs,” Colin Cox remarks.

Future Development As the food and drink industry becomes increasingly consolidated, Meller is adapting to the changing demands of its clients as they drive efficiencies throughout all aspects of their business. This has involved Meller working more closely with clients.

“We are now discussing total capital expenditure management across companies so that efficiencies can be driven from the boardroom to each factory,” managing director Graham Cartledge explains. “Due to our impartiality we are now trusted by our clients to advise on day to day contract management, purchasing issues, best value techniques and preferred suppliers lists.”

Meller’s continued growth looks sure to develop. “All of our schemes are reviewed to ensure we continue to deliver a first class service. Our business grows due to our strong reputation with our client base and this results in over 90% repeat business.” Graham Cartledge points out. “Delivering successfully for our clients is the key to our success.”

For further information on Meller visit www.mellerltd.co.uk or contact Sam Riedy on Tel +44 (0)1509 670036.

isfaction. For this reason, Ardo’s philosophy from the start has been to sell directly to the customer. In every country in which Ardo is active, the sales offices are run by its own commercial employees.

The Ardo product range offers a wide

variety of frozen vegetables, vegetable mixes, vegetable preparations and fruit, and the company has a strong track record of continuous innovation in developing products and production methods in association with its customers. J

Cold Storage Specialist Constructing a Name for Itself Chalcroft Construction specialises in the food sector, “Chalcroft has more than thirty years of experience in whether it is a multi-million-pound new build warebuilding projects for industrial and commercial clients housing and packing site or a complex refurbishment throughout the UK and we have developed an excellent project that incorporates cold storage facilities. The reputation for quality and reliability,” comments Mark company, which operates across the UK from bases in Reeve managing director of Chalcroft. “But, success is East Anglia and the West Midlands, can list houseachieved through teamwork and each project is the perhold names such as Coca-Cola, Kellogg’s, Dairy Crest, sonal responsibility of a Chalcroft director, delivering a and Nestle among its client base. specialist professional service. We deal honestly with our One of the most recent completions from Chalcroft clients, securing long-term relationships by exceeding our was for Dover-based Tilmanstone Salads, part of contractual obligations and providing outstanding service Bakkavör Group, which prepares a number of valueand value.” added salads and vegetable product ranges for a Chalcroft has also recently completed work on a new £4 well-known, premier UK high street retailer. million cold and chill store facility that will help thirdChalcroft has also recently secured contracts for a party logistics (3PL) firm Grocontinental expand its serrange of food companies across the UK, including the vices. development of a high-care temperature-controlled Shropshire-based Grocontinental has embarked on a production facility for a major producer in Mark Reeve, managing director of controlled expansion programme, aimed at ensuring existLincolnshire, and a chill store extension for a food Chalcroft Contruction. ing customer requirements are met, and has invested in a wholesaler in Hertfordshire. new truck fleet and new facilities.

Last year, Ardo contracted Chalcroft Construction in a £5.7 million, 44So, when the company wanted to build a new chill and cold store at its week scheme that involved adding new offices, a packing hall and a statebase on the Whitchurch Business Park, Whitchurch, Shropshire, it turned to of-the-art cold store to Ardo UK’s facility, in Ashford Road, Charing, Kent. trusted supplier Chalcroft, which it has been working with since 1994.

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

29

I FACTORY OPTIMISATION

Breaking the 60% Performance Barrier Without Breaking the Bank

By Ed Handyside, Director of Forward Vision As both profit margins and sources of capital investment continue to be squeezed, most food and drink manufacturers are invoking the maxim of Dwight D Eisenhower: “Just do what you can, where you are, with what you have.” f course, world-beating manufacturing performance was always been more O than relying on the latest technology.

Toyota’s Taiichi Ohno once observed: “I don’t like giving managers money for new equipment; it stops them from thinking.”

But despite the range of performance strategies and techniques many businesses, having made significant gains in the past, are finding it difficult to sustain momentum. Like something from ‘A Hitchhiker’s Guide to the Galaxy’, it seems that the ultimate answer is invariably 60%, and the ultimate question is: What is OEE in a food factory? (Here I assume that performance is measured accurately and against a true and standard, and accept that equipment dedicated to staple products will usually achieve appreciably more).

Five Essential Ingredients

As we resolve the more debilitating problems and eliminate the more obvious wastes we become increasingly reliant on the efforts and ingenuity of those who do the work; only they have enough understanding of the equipment, materials and processes to take us further. Harnessing that contribution requires five essential ingredients: ownership; accountability; prompt and meaningful performance data; standardised methods; robustness and responsiveness.

Production teams must own the equipment and the performance that comes from

But despite the range of performance strategies and techniques many businesses, having made significant gains in the past, are finding it difficult to sustain momentum.

it. A common failing is the lack of Autonomous Maintenance – an essential component of any TPM programme, without which it’s very difficult to transcend a distinctly average performance. We can’t have enough skilled engineers in a modern competitive factory. We need to ensure their time is spent doing the things that only they can do; production teams themselves must undertake most regular, cyclic maintenance. This dedicates our engineers to major overhauls and outages, problem solving, proactive condition monitoring, equipment histories for predictive maintenance, energy reduction and modifying equipment to yield levels of performance that our equipment suppliers never thought possible.

Too much capacity is lost not so much to equipment breakdown but to failures in the supply chain and sporadic workflow. We need adequate planning systems and perhaps some prudent demand forecasting, but there’s something else. In truly Lean businesses the needs of downstream processes are served with a passion that borders on religious fanaticism.

antee the efficiency of their customers by giving them precisely what they need.

Internal quality and service are the make or break KPIs in such high achieving businesses: not just for direct operations but for technical and commercial functions too.

This ushers in our next requirement: swift, meaningful, live and accurate data.

Performance is best appreciated and problems best understood and resolved when the numbers are still warm. Data concerning quality and delivery performance should be reviewed daily – ideally immediately the shift is complete and with an expectation of improvement action within 24 hours. Suppose we ask someone leaving the factory at the end of their shift how their team has performed that day – especially for its downstream customers. Could they tell us, and could they tell us with numbers? Imagine if everyone in the business could do just that? There are factories that don’t need to dream.

Our goal is to optimise the performance of the factory as a whole – from receipt of raw ingredients to despatch of finished product, not just maximising the utilisation of selected assets.

Best Run Factories

Optimising Performance

Our goal is to optimise the performance of the factory as a whole – from receipt of raw ingredients to despatch of finished product, not just maximising the utilisation of selected assets. The world’s most efficient factories are those where teams and functions are not primarily concerned with their own efficiency but have a first duty to guarFOOD & DRINK BUSINESS EUROPE, MARCH 2010

The best run factories don’t have to fight the same battles over and over. Thorough standardised methods, mean that problems, once solved, stay solved – they don’t come back and haunt us next week or next year – and we can concentrate on making further progress from the foundation of a known condition. By standardisation is not meant the tired and often superficial “SOPs” that 31

are now ubiquitous – and if our people despise them as not worth the paper they are written on, they’re probably right. Real standardised methods practiced in all their essential details, by all staff on all shifts, for start-ups, changeovers, clean-downs and maintenance. They are the foundation of quality, productivity, genuine skills, stable and repeatable processes, safe working and the elimination of error. Too important to be left to anyone else, they are the property of operating teams and the responsibility of team management: to draft, instruct,

The world’s most efficient factories are those where teams and functions are not primarily concerned with their own efficiency but have a first duty to guarantee the efficiency of their customers by giving them precisely what they need.

32

enforce and improve them.

Achieving quality and service levels to our customers at total lowest cost: reducing the cost of excess handling, of additional chillers, freezers and third party warehouses; of wasted ingredients and packing materials and their disposal; of excess inventory and the burden of working capital, demands robustness and responsiveness at every stage of the process and reducing to a minimum the required throughput time from raw ingredients to the despatch of finished product.

Endemic in our industry is a tendency to regard product changeovers as anathema, to be avoided as much as possible by whatever means. As we avoid them the worse we get at doing them. But as retailers themselves adopt lean approaches they will inevitably became more frequent; we have to get over it – and get good at it. With sound disciplines there are very few machines or lines that need more than 15 minutes to clean down or change over.

In a capital-intensive business, far from disrupting the work, setting up to achieve optimal running, changeover, cleaning down, carrying out planned maintenance is

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

The best run factories don’t have to fight the same battles over and over. Thorough standardised methods, mean that problems, once solved, stay solved. the work, where the real skill is, where we excel and take most pride; less demanding is the time when equipment is running – and running at peak performance as the consequence of a job well done. For further information contact Coriolis Ltd on Tel +44 (0)8452 26 33 64 or visit www.Coriolis.co.uk.

Ed Handyside is founder and director of Forward Vision, a division of Coriolis Ltd. Originator of Nissan UK’s management and productivity training programmes and author of Genba Kanri: The Disciplines of Real Leadership in the Workplace (Gower, 1997), he has been a practitioner and innovator in Lean Manufacturing for over 25 years. J

I FACTORY OPTIMISATION

Idhammar Systems – Making Every Second of Production Count or most food and beverage manufacturF ers, margins are tight and profits come from the last few percent of volumes made, so high levels of OEE are not simply targets, they are survival levels.

This is the reason why food and drink companies were the first to adopt OEE as a measure to try and squeeze the highest levels of performance from their assets, and explains why growing numbers are implementing OEE systems as the best way to quantify improvement opportunities and sustain a competitive-edge.

Overall Equipment Effectiveness (OEE) is a powerful industry standard measure that multiplies plant availability and performance with output quality, to identify all aspects of waste in your production process. Whilst you can measure OEE with a spreadsheet, OEE Systems go even further, enabling you to seek out even the smallest opportunities to help you make every second count, driving operational improvement agendas and allowing resources to be deployed for the quickest

return.

Furthermore, the benefits of integrating CMMS and OEE Systems to support an overall manufacturing strategy are being realised as manufacturers seek to ensure effective maintenance is in place and costs are reduced. Regularly revisiting PM schedules to add, remove and improve maintenance tasks according to the trends

of the OEE Improvement Agenda, enables manufacturers to improve uptime - and their OEE score.

Idhammar’s CMMS and OEE Systems are already providing financial benefits to a wide range of leading food and beverage manufacturers, from Premier Foods, Aunt Bessie’s, and Constellation Europe, to Burton’s Foods and Halewood International.

The long-term gain of any systems’ installation is often dependent on a few critical success factors; including full support from senior management, shop-floor buy-in, careful scoping of requirements, and the setting of realistic targets. All of these principles are well understood and demonstrated through the recent installation at Halewood International. J

I CASE STUDY

Idhammar MMS – Maintaining a Steady Flow at Halewood International roducing tens of millions of cases of ‘big P brand’ beverages every year is heavy work that requires a reliable plant – but with visionary entrepreneur John Halewood at the helm – the UK’s largest independent drinks manufacturing and distributing company is growing from strength to strength. With a turnover in excess of £250 million, over 1500 employees worldwide, and a focus on New Product Development, Halewood International boasts an impressive portfolio of favourite alcoholic drinks including Lambrini, Red Square Vodka, Lamb’s Navy Rum, and Crabbie’s Original Alcoholic Ginger Beer.

In 2009, the distillery and bottling plant in Liverpool which produces 11 million cases per annum, embarked on its ‘lean

journey’ and is using the Idhammar MMS to facilitate a number of TPM and continuous improvement initiatives including, 5s and Loss Prevention workshops for operators. With a dedicated Steering Team in place to use and shape the system, this focused and managed approach to plant maintenance is resulting in significant operational benefits for the 20-strong engineering team at the site.

Making Maintenance a Management Priority

In 2008 when Halewood was looking to replace its maintenance T-Card System, Operations Director Graeme Macfarlane (now Continuous Improvement Director) recommended implementing a CMMS having seen the operational benefits delivFOOD & DRINK BUSINESS EUROPE, MARCH 2010

ered by systems in the past. As a result, the company put to tender for a planned maintenance system, considering ERP solution offerings as well as standalone CMMS before choosing to implement the Idhammar Maintenance Management System based on the ‘best of breed’ functionality and analysis capability it would 33

I FACTORY OPTIMISATION

Delivering Profitability in Today’s Fast Paced Food Industry Any business which converts raw materials into finished product will have unac“countable losses unless they have an effective Factory Floor Profitability System in place to provide real time data for their ERP system.

Our Marco Trac-IT system has given us an environment where we now have total control, total reportability, less mistakes and one where every action is electronically logged.

This clearer operational visibility has enabled us to significantly reduce our raw material stock holding levels,” says Neil Drew of Unilever Icecream UK More and more of today’s manufacturing companies are becoming reliant on ERP systems to coordinate and control their operational activities. However Marco’s Factory Floor Profitability Experts believe many companies are not able to optimise the effectiveness of their ERP system. Marco have built a strong track record with leading worldwide brands and have proven that they can deliver significant and sustainable advantages by providing crucial and often hidden information for ERP systems, directly from the factory floor.

The notorious ‘unaccountable losses’ usually arise from the inability of the system to access and use essential factory floor data in 34

real-time. The food industry is a classic example where a lack of accurate information, right through from goods in to goods out, can cause a serious ‘profit-sapping’ problem. In such fast moving ever-changing environments, keeping the finger on the pulse is critical.

Companies typically manufacture their products based on pre-defined recipes. ERP systems normally work on preset targets for the batches and all subsequent upstream and

downstream calculations assume that during the process these targets are met - precisely.

Under normal circumstances they have no real-time information to contradict this assumption and under these circumstances unaccountable losses can occur.

As Marco’s managing director Murray FOOD & DRINK BUSINESS EUROPE, MARCH 2010

Hilborne explains: “In many applications where we carry out profit-hiding audits, it is as though there is a thick fog permeating across the factory floor, keeping critical data away from the ERP system.

Unfortunately many ERP vendors don’t fully appreciate or understand the practical issues of key factory floor processes. In fast moving processing environments, real time information is essential. Our Marco TracIT system ensures that data from all key performance locations (KPL) is instantly available to the ERP system so that it can react to actual, rather than assumed, information. Marco Trac-IT brings true integration that continually fine tunes and improves overall equipment effectiveness (OEE). The ‘improve’ factor allows processes to be optimised exactly where and when it’s needed, making full use of dynamic data. This approach is highly effective in improving productivity, optimising raw material usage and minimising wastage, thereby ensuring ongoing profitability and, above all, end customer satisfaction. Traceability in line with legislation is an integral part of our overall concept.”

For further information visit www.marco.co.uk or e-mail sales@marco.co.uk. J

halved the number of outstanding jobs at any one time, we’re well on our way to reaching our target of only 10. My role then as Continuous Improvement Director is to make sure that the target doesn’t become too soft - and re-set it to zero.”

There are already plans afoot to extend the use of the system outside of the Steering Team by installing PCs on the shop-floor. This will then negate the need for the existing paper based Work Order/Worksheet System and reduce the Job review and analysis lead time. In time, the plan is to make this process even quicker using PDAs and barcode readers.

Taking Stock

In the meantime, the Steering Team is in the process of loading current stores into the Idhammar MMS in order to gain sight of, quantify, and potentially re-deploy the cash tied up in any redundant stock.

Preliminary activity in this area suggests an initial estimate of 20% reduction in current inventory overheads. This process will also reduce time required at the stores counter and ensure there are no stock-outs at the site.

As planned, the system is generating an accurate picture of the maintenance and

provide.

Understanding the importance of gaining management and user buy-in, setting realistic targets, prioritising the functionality required, and the requirement for effective training programmes, Graeme Macfarlane ensured the CMMS implementation proved a success.

“We didn’t rush into implementing the system. We took a step back, made sure we had buy-in from the engineering Steering Team, planned how the system could be used to assist our processes, and provided user training sessions – as a result the team is immediately recognising the benefits. It’s working exactly as we planned it would,” says Graeme Macfarlane.

From the start of the project, gaining visibility of maintenance activity was a key objective. One of the engineering team’s KPIs is the number of outstanding job cards for plant maintenance.

This KPI is measured by the number of worksheets issued, compared to the number completed correctly and returned on time.

Graeme Macfarlane explains: “When we started measuring work flow – we were inundated with outstanding job cards and some of the jobs were being missed. Since implementing the Idhammar MMS we’ve gained control, and having more than

engineering work undertaken at the Liverpool site as well as highlighting opportunities for improvement.

Supporting Audit and Compliance

Demonstrating regulatory compliance is often a key driver for purchasing a CMMS, particularly in the heavily regulated industries like food and beverage manufacturing.

Halewood International is a BRC accredited company and has found the ‘central library’ function of the system a very useful knowledge-management tool that supports audit and compliance as well as best working practices and procedures. The Idhammar MMS provides a central data repository and document library – ensuring permits to work, training and health & safety certificates etc, are assigned to each asset along with a historical log of all plant maintenance. This collective information bank also promotes knowledge sharing.

The maintenance team at Halewood International holds the key to maximising asset performance, minimising downtime and controlling production costs, whilst the Idhammar MMS is providing the foundation to deliver this efficient, effective maintenance. J FOOD & DRINK BUSINESS EUROPE, MARCH 2010

35

I FOCUS ON IRELAND

Ireland – The Food Export Island The food and drink industries in the Republic of Ireland and Northern Ireland are the largest indigenous manufacturing sectors in each region and are crucial to each country’s economic prosperity. he food and drink industry in the Republic of Ireland has a gross output of over Eur18 billion and total exports exceeding Eur7 billion. The industry accounts for 8% of GDP and over 18% of gross value added (GVA) in manufacturing.

Food and drink is also Northern Ireland biggest manufacturing industry, providing jobs for 23% of the country’s manufacturing workforce and has enormous potential to develop sales in international markets.

Great Britain remains Northern Ireland’s largest overseas market for food and drink products with annual sales there worth about £1.5 billion, well ahead of the more than £600 million of exports generated by international markets as diverse as the US, China and the Middle East, as well as major European markets such as France and Italy.

T

strong in meat processing and dairying but have also developed a sophisticated convenience food sector as well as an international expertise in food ingredients.

As its nearest neighbour and traditional trading partner, the UK is still the main destination for food and drink exports from

the Republic of Ireland and purchased 44% of its total last year, although its share of trade came under pressure as the year progressed, dropping from 48% in January to approximately 43% by late 2009. The Republic of Ireland’s sales to the UK in 2009 amounted to just under Eur3.1 bil-

Food and Drink Manufacturers in Ireland Turnover

Pre-tax Profits

1 Kerry Group 2 Aryzta 3 Total Produce 4 Glanbia 5 Irish Dairy Board 6 Diageo Ireland 7 Greencore 8 Dawn Meats Group 9 Irish Food Processors 10 Ballina Beverages 11 Kepak 12 Pepsi Cola International 13 Fyffes 14 Moy Park 15 Dairygold Co-op 16 C & C Group 17 Irish Distillers Group

(€) 4.52b 3.21b 2.43b 2.23b 2.09b 1.90b 1.10b 900.0m 850mE 800mE 750.0m 750mE 726.8m 724.0m 688.1m 514.4m 450mE

(€) 251.9m 247.3m 28.4m 100.0m 24.3m nd -0.41m nd nd nd nd nd 21.2m -16.4m 1.31m -65.8m nd

18 Lakeland Dairies 19 United Dairy Farmers 20 Cadbury Ireland 21 Heineken Ireland 22 Unilever Foods Ireland

435.0m 407.7m 350mE 346.0m 312.2m

1.37m 2.1m nd nd 71.1m

within the butter, cheese and dairy ingredients

23 Diageo NI 24 Fane Valley Co-op 25 Green Isle Foods

303.4m 300.1m 300mE

29.6m 3.9m nd

sectors in Britain.

Source: Company accounts, Irish Times, Belfast Telegraph. £=Eur0.90

Export Driven Given the relatively small size of their domestic markets, exports are vital to the food and drink manufacturing industries on both sides of the Irish border. The two national industries have traditionally been

The Irish Dairy Board is one of the leading players

Company

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

Ownership/Status

co-op/plc plc plc co-op/plc co-op Diageo, UK plc independent independent Coca-Cola, US independent PepsiCo, US plc Mafrig, Brazil co-op plc Pernod Ricard, France co-op co-op Kraft Foods, US Heineken, Holland Unilever, UK/Netherlands Diageo, UK co-op Northern Foods, UK

37

lion, a decrease of 15% on the previous year.

wich maker in Britain and also holds leading positions in other convenience food sectors. Green Isle Foods, which is part of Northern Foods, is a leading player in frozen pizza with its Goodfella’s brand. Aryzta is a leader in the British speciality bakery products market.

Currency Factors While the current weakness of sterling has aided Northern Ireland’s export business, it has negatively impacted on the Republic of Ireland’s. For instance, the depreciation of sterling reduced the value International Production Base of the Republic of Ireland’s food and Ireland is used as a production base by drink export sales to the UK by an estimany leading international food and mated Eur400 million last year. drink manufacturers. Both Coca-Cola According to Bord Bia, the trade develand PepsiCo have built soft drinks conopment and promotion agency for the Irish food companies now hold UK market leading positions centrate factories in the country to serve Republic of Ireland’s food and drink in areas such as convenience foods, ready meals, pizza, their wider European operations, and industry, a sustained decline in the value food ingredients, dairy products and beef.

Wyeth has a major baby food manufacof sterling combined with the global ecoturing operation in Ireland. nomic downturn created unprecedented ing base in the UK. Other major international food and challenges for food and drink exporters The Irish Dairy Board is one of the lead- drinks groups with a strong presence in throughout 2009, as the value of total sales ing players within the butter, cheese and Ireland include Unilever, Nestle, Cadbury, abroad declined by 12%, or by just under dairy ingredients sectors in Britain. Diageo, Pernod Ricard, Heineken, Mars, Eur1 billion, to Eur7.12 billion. There are Greencore is the largest pre-packed sand- Coca-Cola Hellenic and HJ Heinz. J indications, however, that export values are now beginning to stabilise and Bord Bia predicts some recovery in 2010.

Top 50 Players The Top 50 food and drink manufacturers in Ireland, both North and South, are listed according to turnover in the Table. The top seven players have annual sales in excess of Eur1 billion.

Republic of Ireland-based businesses are dominant with only seven companies from Northern Ireland featuring in the Top 50 .Moy Park, United Dairy Farmers, Fane Valley Co-op, Foyle Food Group, Diageo Northern Ireland, Coca-Cola HBC and O’Kane Poultry.

Global ingredients, flavours and consumer foods producer Kerry Group heads the league table, while Northern Ireland’s largest food company, Moy Park, with a turnover of £651.6 million (Eur724 million) ranks 14th.

The largest sectors within the Irish food and drink industry are dairy products and ingredients, prepared foods, meat and poultry, and beverages, and this is reflected in the composition of the Top 50. Including Glanbia, Dairygold and United Dairy Farmers, fourteen dairy companies feature in the Top 50 along with eleven meat processors.

Strong UK Influence Most of the major players within the Top 50 are active throughout the whole of Ireland and have also developed substantial businesses in Great Britain. Indeed, Irish food companies now hold UK market leading positions in areas such as convenience foods, ready meals, pizza, food ingredients, dairy products and beef.

The top three Irish meat companies – Irish Food Processors (which incorporates Anglo Beef Processors), Kepak and Dawn Group - have built up a substantial process-

Food and Drink Manufacturers in Ireland Company

26 Keelings 27 Reox Holdings 28 Wyeth Nutritionals Ireland 29 Coca-Cola Bottlers/ John Daly & Co

30 Gleeson Group 31 Carbery Group 32 Rosderra Meats 33 Britvic Ireland 34 Foyle Food Group 35 Coca-Cola HBC 36 Slaney Foods 37 Tipperary Co-op Creamery 38 Arrabawn Co-op 39 Town of Monaghan Co-op 40 Mars Foods Ireland 41 O’Kane Group 42 Kildare Chilling Company 43 Nestle Ireland 44 Carton Group 45 Premier Foods 44 Monaghan Middlebrook Mushrooms

47 Liffey Meats 48 Donegal Creameries 49 Jacob Fruitfield Foods 50 HJ Heinz Ireland

Turnover

Pre-tax Profits

Ownership/Status

(€) 295mE 280.0m 260mE

(€) nd 8.2m nd

independent Kerry Group Wyeth, US

251.6m 243.0m 226.0m 225mE 218.1m 201.1m 190.8m 190mE 169.4m 165.0m 160.0m 153.4m 145.8m 145mE 144.0m 143.0m 141.9m

8.2m 5.3m 8.5m nd 14.0m 5.2m 11.6m nd nd -2.0m nd 16.1m 1.4m nd nd nd 14.4m

CCHBC, Greece independent West Cork co-ops independent Britvic, UK independent CCHBC, Greece independent co-op co-op co-op Mars, US independent independent Nestle, Switzerland independent Premier Foods, UK

140.3m 130.0m 129.9m 121.5m 108.9m

4.8m nd 0.7m 27.4m 15.9m

independent independent co-op independent HJ Heinz, US

Source: Company accounts, Irish Times, Belfast Telegraph.

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

39

I FOCUS ON IRELAND

Financing in a Difficult Market

By Helen Kelly, Corporate Director, Barclays 009 was another challenging year for Irish food and drink (F&D) manufacturers, not helped by the difficult conditions in the banking markets. There was a significant degree of uncertainty as banks’ costs of funding increased and higher risk premia was sought for both banks and corporates.

Governments intervened in the form of higher capital ratios and bank nationalisations and tighter lending criteria were applied.

Combined with limited M+A activity and de-leveraging across the board, a lack of supply currently exists in the bank loan markets. This is set to continue into 2010 and the cost of funding is also likely to remain high.

2

Impact on Irish Borrowers In terms of execution considerations, we saw smaller ticket sizes, particularly for new bank borrowers. Club style executions replaced bi-lateral facilities for larger deals and will continue until the market has an appetite to underwrite and then distribute them to a more receptive investor base. Key is that all banks lend on the same terms ie on a ‘pari-passu’ basis. Also the maximum tenor on financings is now three years for the majority of deals.

Covenants have been tightened in line with heightened credit risks with maximum Net Debt to EBITDA of three times and there are also tighter management information requirements.

Capital/pricing committees have become as important as Credit Committees in all banks. Credit lines need to be supported by ancillary ‘non risk’ income. Finance directors are therefore paying more attention to sharing their transactional banking around their lending banks.

Whilst margins for drawn loans have risen in multiples due to the shortage of liquidity and heightened credit concerns, it is important to note that the relative cost of borrowing is lower than in the boom years leading up to 2007 due to lower Euribor interest base rates.

How are Irish Companies Reacting?

Over the last 12-18 months Irish F&D manufacturers have been focused on taking cost from their businesses, largely centred 40

Helen Kelly, corporate director, Barclays.

on staffing numbers.

There has also been a focus on reducing their borrowing requirements. M+A has been off the agenda for most as they have significant capital expenditure projects.

Dividends have been cut and there has also been a strong focus on reducing working capital. Higher commitment fees mean clients no longer want to pay for headroom.

Larger corporates have sought to mitigate their refinancing risk by bi-passing the traditional bank markets - Kerry Group and Arytza both accessed the US Private Placement market last year and we expect more Irish F&D companies to follow this route in 2010. We see the European corporate funding model moving closer to the US model – banks providing short term funding and debt capital markets being used to fund longer term debt. Barclays acted as agent on four of the five Irish deals done in the USPP market in 2009.

Other corporates have sought to divest non-core activities. For example Greencore recently sold their malt business, a deal which we also advised on.

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

Outlook for 2010 The UK economy which is the biggest market for Irish F&D manufacturers is likely to be difficult in 2010, this has implications for the demand for Irish products and also for the sterling/euro exchange rate. Risk Management has become even more important whether that be fixing interest rates and/or dealing with foreign exchange.

We are also helping clients to hedge their commodity exposures to help give them certainty over costs and to be more competitive.

Irish manufacturers are now emerging leaner and fitter and are looking to position themselves for the upturn which we expect to see later in 2010. The year kicked off with Kraft's takeover of Cadbury. We expect to see a pick up in M+A activity in 2010 given that business valuations are low and we are helping our Irish clients to pick up investment opportunities. We recently provided a sizeable war chest facility for a major Irish food company that is looking to make acquisitions abroad.

The Barclays Group had a strong performance in 2009 and Barclays Bank Ireland (established 32 years), has also delivered good growth over the last 12 months. Our focus is on delivering financial solutions to clients by offering specialist industry sector knowledge and using the expertise, offering and depth of a global bank. We have relationships with 8 of the top 10 F&D companies in Ireland and in 2010, we are actively targeting new clients in the sector.

In order to help our F&D sector clients with their strategic thinking, we recently commissioned a report by Verdict Research. The report entitled ‘Time for Dessert?’ highlighted how the recession has impacted on the consumer mindset both here and in the UK, what key sector trends are emerging for 2010 and how retailers and their suppliers can hope to drive growth. ‘Time for Dessert’ is available from Barclays Bank Ireland at 00 353 1 6182633. J

Tetra Pak CPS Shaping the Next Generation

Tetra Pak CPS, the leading provider of quality hygienic process equipment and turnkey systems, has been commissioned by Reaseheath College to supply a multi-million pound state-of-the-art teaching dairy in the UK. The custom built facility at the Cheshire-based college will play a major role in a new training programme. Project Eden, a cutting edge training scheme funded by the Northwest Development Agency, will provide higher level qualifications for those in the dairy processing and manufacturing sector. Renowned for using up-to-the-minute production methods and techniques in World Class Manufacturing, Tetra Pak CPS was the ideal partner for Reaseheath.

Following several months of deliberations Reaseheath and Tetra Pak CPS have worked together and finalised the overall scope of supply for the new teaching facility. For further information contact Tetra Pak CPS on Tel +44 (0)1935 818800 or visit www.tetrapakcps.co.uk. J

cidal rubber compound that actively prevents bacterial and fungal formations. Available in three surface finishes for dry, damp and wet conditions, Ergolastec Clean is highly slip resistant and offers excellent insulation on cold floors. The firm yet springy texture is proven to reduce the strain on the legs, hips and spine to create an exceptionally safe and comfortable work environment for staff. The special low odour formulation is tailored for food environments.

For more information contact Kraiburg on Tel *44 (0)1278 727755 or visit www.kraiburg. co.uk\ergolastec. J

If you are responsible for health and safety within your business a brand new, ultra hygienic work mat from safety matting experts Ergolastec will help you improve hygiene and productivity, and reduce the risk of slips and trips.

This new product - Ergolastec Clean - is launching at FoodEx this year on stand VO42. Ideally suited for food processing sites and food preparation areas, Ergolastec Clean is manufactured from a specially formulated bio-

Ulrick & Short’s Complex Formula Can ‘Meat’ Tough Guidelines

Vancouver and Grundfos Leave a Lasting Legacy

From Flexicon’s TIP-TITE range of dumpers, the latest, allnew, Box-Container Dumper forms a dust-tight seal between the container and the equipment, tips the container and discharges bulk material through a chute at controlled rates. The Box-Container Dumper accommodates boxes and bins from 915mm to 1220mm on a side and 990mm to 1120mm overall height. The container platform is raised by a single hydraulic cylinder, creating a dust-tight seal between the top edge of a box (or rim of a drum) and the underside of the containment hood. Twin hydraulic cylinders then pivot the platform-hood assembly, with container intact, to 45, 60 or 90 degrees beyond horizontal, including a motion-dampening feature at the termination of container rotation. The

also provide back-up, roles undertaken by a range of Grundfos UPE and TPE pumps. J

I INGREDIENTS

I PUMPS

Box Container Dumper Unveiled by Flexicon

Simple Solution for More Health, Safety, Hygiene and Productivity

dumper is constructed of stainless steel to food, pharmaceutical or industrial standards, and of mild steel with durable industrial coatings. For further information contact Flexicon (Europe) on Tel +44 (0)1227 374710 or visit www. flexicon. co.uk. J

The XXI Winter Games may now be over but they leave behind them an admirable legacy. This success can partly be attributed to the organisers who ensured that whatever infrastructure was added to support the Games was incorporated into the area sympathetically and met the highest environmental standards.

But perhaps the gold medal performance should be awarded to the advanced district energy system that was purpose built 500m from the Athletes Village.

This award winning system takes the effluent heat from the municipal wastewater treatment system, recovers it and circulates it by way of three PACO (part of the Grundfos family of companies) base-mounted pumps. Supplied complete with premium efficiency motors these pumps effortlessly circulate the water through 2 km of pipes that connect all the buildings. It is expected that 95% of the village’s entire consumption will be realised from the wastewater treatment. The remaining 5% is being supplied by traditional hot water boilers that will

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

Following a major scientific breakthrough by Ulrick & Short, the leading clean label ingredients specialist has announced the launch of its brand new functional binder and emulsifier for formulating re-formed and comminuted meat products. Complex E is the latest addition to Ulrick & Short’s long established range of clean label wheat proteins and was designed to provide meat processors with greater formulation flexibility at a significantly lower cost than other binders already on the market. With the meat industry coming under the spotlight again with more stringent ingredient regulations, the timing of Complex E's launch is perfect. Complex E meets the needs of the industry, which is crying out for a highly functional clean label binding solution that can deliver on succulence, taste, texture and quality. For further information contact Ulrick & Short on Tel +44 (0)1977 620011 or visit www.ulrickandshort.com. J

43

I WATER TREATMENT

Water Treatment Solutions From Puresep s water costs rise the treatA ment and recycling of site water for use in other processes is becoming more financially advantageous. As a leading water process company, Puresep offers several state-ofthe-art technologies. For the purpose of this article, three complementary technologies will be looked at - Ultraviolet irradiation (UV), PureSec electrochlorination and PureChlor chlorine dioxide. All of these have recently been installed at food and beverage sites across the UK.

sterilant, to a prescribed residual with contact time. To prevent water or final product tainting, a PureFlow Carbon adsorption process removes free residual chlorine. Post UV, final filters offer cryptosporidium protection before supply to product make up. A PureFlow Reverse Osmosis system treats the product make up water, to supply low mineral content water for isotonic beverage production, with a point of use UV steriliser on the treated water storage tank outlet.

PureSec Electrochlorination

PureSec electrochlorination systems generate onsite chlorine solutions. Brine is converted to produce 1% chlorine solution by electrolysis, salt and power are the raw materials for the process. The solution is safe to store and UV is primarily employed as a disinfection stable for long periods process that inactivates waterborne with no loss of activity. pathogens without using chemicals.

Multiple points of use can be applied from a common Ultraviolet Irradiation storage tank, with dosing conUV is primarily employed as a trol feedback via specific ion disinfection process that inacti- residual sensors. vates waterborne pathogens Over recent years the PureSec without using chemicals, where electrochlorination system has UV light changes the DNA and gained favour, due to the elimiprotein structure of viruses and nation of transportation, hanbacteria and stops them from dling and storage of chlorine reproducing. gas or other disinfection chemiAdvantages of UV disinfec- cals. This results in a safe, relition include: able and economic method of • Effective for all types of disinfection. The full range of microorganisms, • Low capital, operating and maintenance costs, • Compact and easy to install, • Efficacy is independent of Ph, • No impact to the aesthetic water quality, • Safe and environmentallyfriendly.

A Puresep Water UV system was recently installed at a soft drinks production factory, as a final sterilisation process.

PureSec electrochlorination systems Upstream of the UV, town’s onsite chlorine solutions. water is treated with a chlorine 44

PureSec systems are PLC controlled and have the flexibility to be configured to site specific process control requirements. It is well suited to the treatment of product water, drinking water, cooling water, as well as other industrial applications.

Puresep recently installed a PureSec electrochlorination system at Britvic Soft Drinks replacing a chlorine gas system. The electrochlorinator produces 36kg per day of chlorine supplying a buffer storage vessel with level control for PureChlor chlorine dioxide plant. make up. The point of use dosing system is a duty/ standrange it operates in, by pump arrangement with • Hugely efficient low chemical feedback control for chemical usage ensuring a safer enviinjection and an auto pump ronment for everyone, changeover facility.

• Zero harmful chlorinated by“We chose the PureSec products, Electrochlorination system due • Easy future expansion, to its high level of safety and • Single reagent storage area. efficiency, and the specialised A PureChlor chlorine dioxide knowledge of the Puresep engi- system has been installed at neers,” says Kevin Universal Beverages, where the Cunningham, engineering sup- system feeds five points of use, port team leader at Britvic Soft these applications are; de-aeratDrink. ed liquor, softened towns water, 2 CIP lines and post carPureChlor Chlorine Dioxide bon filtered water.

PureChlor chlorine dioxide is “The PureChlor chlorine where chlorine dioxide is pro- dioxide system is very efficient duced through the tightly con- for our needs and the fact that trolled mixing of Puregen base we can use one system with reagents. Chlorine dioxide is a numerous points of use makes powerful disinfectant making it it operationally beneficial and an effective and fast acting cost effective,” explains Chris killer, by breaking down cell Newall, operations director of walls and attacking bio film UBL. leaving no resistant There are numerous options strains. It is well suit- to efficiently and effectively ed to a range of water treat water - the fundamental treatment applications issue is to understand which at low concentration, option best suites the plant in including CIP, feed question, the application and water, product water the financial viability. Puresep and water re-use. The provides onsite consultancy serPureChlor systems are vices to review and assist comPLC controlled with panies with their water treatfull safety features and ment needs, ensuring process, multiple point of use. financial and legislative requireBenefits include: ments are fulfilled. For further generate • Fast acting killer information visit www.pureunaffected by the pH sep.com. J

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

I WATER MANAGEMENT

Federation House Commitment Gathers Momentum he food and drink industry in England and wide target of 20% reduction in water usage Wales is estimated to use nearly 157 million by the year 2020.

T cubic metres of water annually. Improving The FHC initiative has the potential to save water efficiency could cut water and effluent bills by 30% with further projects and technology increasing this saving up to 50%.

More than forty companies, including Britvic, Cadbury, Dairy Crest, Nestle UK, PespsiCo UK & Ireland, R&R Ice Cream, Premier Foods and Warburtons, have already joined the Federation House Commitment (FHC), which was launched in 2008.

The Federation House Commitment (the FHC) is an agreement by companies in the food and drink industry to reduce their water usage and work towards an overall industry-

around 140 thousand cubic metres per day and a combined financial saving of around £60m per year on water bills. Any company in the food and drink manufacturing industry can join and membership is free.

Companies who join the FHC pledge to review their on-site water use and take action to reduce it. Working with Envirowise, members will review current water use and develop site specific action plans to significantly cut water use and costs within six months of signing up to the commitment. For further information visit www.fhc2020.co.uk. J

New Digital Chlorine Dioxide Testing From Palintest alintest, the leading water analysis technology P company, has developed a completely new method for testing Chlorine Dioxide levels in water.

The ChlordioXense provides accurate testing without relying on subjective analysis for results. The instrument eliminates the potential for user error giving precise, consistent results whatever the operator’s level of experience.

Compared to the US EPA-approved Lissamine Green test method, the ChlordioXense gives accurate results with greater consistency, according to Palintest. This means that the time taken and the training needed to get results is significantly reduced, benefiting a wide range of applications including food processing. For further information visit www.palintest.com. J

I WASTEWATER TREATMENT

Salsnes Filter Saves Manufacturers Millions in Wastewater Treatment Plant Upgrades he Salsnes Filter is a fine mesh sieve with T continuous belt technology which effectively removes solids in a variety of applications. Evergreen Engineering offers the Salsnes Filter for primary treatment, sludge dewatering, and Combined Sewer Overflow (CSO) applications. The Salsnes Filter has been proven to cost-effectively reduce the organic load on downstream processes, increasing biological treatment capacity in existing plants and allowing smaller downstream processes in new plants.

The Salsnes Filter is pre-engineered, very compact and easy to install and operate. Due to its modularity, it can be easily combined with existing technology and used in any size of facility. The Salsnes Filter can be applied at municipal and industrial wastewater treatment plants to filter unwanted organic and inorganic solids from the wastewater flow.

With over 250 installations as of 2009, the filter has been used effectively in the following applications: • Primary Wastewater Treatment • Membrane Pretreatment • Fishing Industry • Food / Dairy Industry 46

• Pulp and Paper Industry • Manure Dewatering • Tanneries.

The Salsnes Filter was designed to relieve primary treatment burden at municipal and industrial plants in a very small footprint, saving major infrastructure investment and space. The filter operates utilizing a continuous fine screen, which removes solids as fine as 10-30 micron. The result is efficient, high percentage removal of TSS and particulate BOD5 in wastewater. For most municipal applications, this means removal of 30-70% TSS and >30% BOD5. Removal of solids is facilitated utilizing a continuous-loop fine mesh screen. Solids collect on the screen forming a mat of sludge. As the screen rotates, a patented air-blower system forces the retained screenings off the mesh and into the screenings hopper, virtually eliminating solids carry-over.

Additionally, a patented intermittent hot water wash periodically removes any oil, fats, grease or other solids that may adhere to the mesh. An auger press dewaters the collected screenings while the filter effluent exits the unit. The innovative technology behind the FOOD & DRINK BUSINESS EUROPE, MARCH 2010

Salsnes Filter provides flexibility in wastewater treatment and reclamation plants.

Screenings dewatering and odour containment are integrated parts of the machine, and the filters are compact, completely covered systems that are easy to maintain. When compared with sedimentation as primary sewage treatment, the Salsnes Filter typically requires less than 50% of the capital investment and less than 10% of the footprint.

For further information contact Evergreen Engineering on Tel +353 1 4640007 or visit www.evergreenengineering.co.uk. J

I RESEARCH & DEVELOPMENT

MicroThermics Brings Efficiencies to the R & D Process icroThermics design and manufacture small scale continuous M flow thermal processors used worldwide by Product Developers and Food Researchers for processes such as single and two stage pasteurization, UHT sterilization, hot fill and others.

This is their specialist field of expertise, recognised by the food and beverage industry worldwide who have their equipment as a key piece of technology in their research and development centres.

Valio Ltd is the biggest milk processor in Finland and a world class pioneer as the developer of functional foods. Valio research and development employs around 132 experts in different fields and releases more than 100 new products every year. Process technology expertise is the cornerstone of Valio’s competitiveness.

In late 2009 Valio R & D took delivery of a MicroThermics processor with a capability for both Direct Steam Injection and Indirect Heating processes. Valio had many requirements as the equipment would be used in both long term strategic development projects and in product development.

Since delivery and onsite training in late 2009 Pia Ollikainen, Senior R & D Scientist has commented on the speed with which they have been able to integrate the processor into their overall R & D activities. They have seen major benefits from the equipment flexibility in terms of the number of samples they can process during any one day. This has efficiency benefits in terms of Food Technology staff utilisation but it also improves the product development timelines which are significantly reduced thus helping bring new products to the market sooner.

As Valio have such a diverse and multi-functional R & D division they have held open days for various internal groups to demonstrate the MicroThermics processor capability. In a very short time Pia Ollikainen said the system will be utilised almost to its full capacity.

the Researchers who work principally on dairy related projects but the system is also used extensively by the food and beverage industry as a resource for their own new product development. At the beginning of this year Teagasc added to the equipment capability with the purchase of a Clean Filling Hood with sterile product outlet. This addition to the capability of their processor was driven by their clients who had a requirement for filling product in a controlled environment. This enables product developers to include shelf life trials.

Food Research Institutes like Teagasc are extensive users of the equipment worldwide and published food research has many references to the use of MicroThermics equipment as the thermal processing choice.

Equipment can be purchased on a phased basis and integrated over time. This could apply to additional items such as Homogeniser, Deaerator, Clean Fill Hood, Additional Hold Tubes etc. Potential customers can be facilitated to have product trials carried out on MicroThermics equipment.

For further information contact Liquid Technologies, Tel +353 (0)53 917 1888, Mobile +353 (0)87 224 5590 or visit www.liquidtechnologies.ie, www.microthermics.com. J

Lab & Mini-Production HTST/UHT/Aseptic Processors Creating Tomorrow’s Products, Cheaper, Faster, Greener.

Other Benefits

Other benefits are the onboard computerised data logging whereby records of product trials are held in the processors data logging system but can also be accessed from their network and downloaded to the technologist’s computer. Correlating the processing parameters and the physical and chemical attributes of the new product is a major part of the food technologist’s work as it is a critical element to satisfactorily transferring the manufacture of the new product to the plant.

It is also possible to simulate on a MicroThermics processor the time temperature history of a known plant process. In some instances clients may want to replicate a plant process using new ingredients as part of a cost reduction exercise. Running a variety of samples with slightly differing formulations can give the company valuable information to make the correct choice. This work is done with no plant downtime, sample size can be as small as 4 to 5 litres, wastage of raw materials is at a minimum due to small samples, disposal of unwanted product is kept to a minimum and the selection process for new formulations is completed in hours or maybe days as against months.

Food Research Institutes

In Ireland at the Teagasc National Food Research Centre in Moorepark, Co. Cork they have a MicroThermics Indirect processor with the option for inline homogenisation. This unit is used by

®

MicroThermics

Invest in tomorrow, invest in your R&D.

MICROTHERMICS , Creating New Products...

Juices, Milk, Soy Milk, Yogurt, Ice Cream and Puddings Call Today To Find Out How We Can Help Make Your Company Greener...

Phone: +1 919 878 8045 Website: www.microthermics.com Email: info@microthermics.com European distributor: Liquid Technologies Phone: +353 53 91 71888 Email: info@liquidtechnologies.ie Website: www.liquidtechnologies.ie

FOOD & DRINK BUSINESS EUROPE, MARCH 2010

47

Kliklok Launches New Cascade Loading System fully automatic ‘Cascade’ Loading System (CLS) has been designed and built by Kliklok to complement its wide range of end load and top load cartoning equipment. The stand-alone unit is designed to feed bags or sachets in singles or collated stacks using a timed 3-stage vertical drop rotor system. The products can be dropped either into the moving flights of an end load cartoner infeed, or directly into a top load carton as part of a forming, filling and closing line. Standard features include an icon based colour touch screen, to enable easy recipe-style product listings and selectable multi-collations for quick change over. With a top speed of 120 products/bags per minute, the CLS has a wide size range, with an ‘XL’ version also available. Kliklok is demonstrating this innovative machine at its plant in Bristol – visit www.kliklok-int.com. J

A

New Brochure Reflects Versatility ieke Dispensing has launched a new product cataR logue which underlines the huge range of dispensers that the company manufactures for the food and drink industry. The diversity of the different models on offer demonstrates Rieke’s flexibility and versatility in meeting the demands of a broad spectrum of companies, from small localised and boutique businesses to major multinationals, with reliable, stylish and user-friendly packaging. Highlights of the new catalogue include the expansion of Rieke’s market leading Airless HVDS system to include sizes from 300g to 1050g, and the introduction of the new DuraTouch range for lotions, which incorporates dispensers from the recently acquired ContinentalAFA business. As well as the extensive choice of dispensers, the brochure also explains the various customisation options available. For further information contact Rieke Dispensing on Tel +44 (0)116 2331100, Email sales@riekedispensing.co.uk. J

I PRODUCT NEWS

Zeina Foods on Show at Food & Drink Expo isitors to the 2010 Food and Drink Expo show in Birmingham this year are likely to be V driven completely nuts by the latest mouth-watering offerings from Zeina Foods. The UK's premier supplier of pistachios, flavoured tree nuts and Middle Eastern products will be officially launching its new range of deglet nour filled dates under the Deliciouslyorkshire umbrella at the event from March 21st to 24th - and just to add to the excitement on Stand P170 at the NEC, visitors will see a darker side to Zeina Foods’ product range. Its latest take on the Middle Eastern fruit will include fillings of cashews and almonds half coated in fine dark chocolate - sure to excite the taste buds of many confectionery connoisseurs at the show. J

Fulton Introduces New ModSync Sequencing System

Fulton Launches New TDS Energy Recovery System

ollowing the introduction of its new VMP vertical steam boiler range, ulton has introduced a new F Fulton Boiler Works continues to innovate with the launch of FTDS (total dissolved solids) ModSync – a new sequencing system for multiple steam and hot water blowdown, energy recovery sysboiler installations. ModSync is designed to maximise the efficiency of multiple boiler installations by providing precise pressure control of the steam system using a pressure transducer installed in the steam header. It is also capable of precise temperature control and lead/lag sequencing on hot water boiler systems. The enhanced lead/lag capabilities of the ModSync system are provided through an easy-to-use touch screen interface, which also provides remote monitoring and text messaging capabilities for quick access to boiler room status; and can be customised to meet multiple boiler room configurations. For further information on the new ModSync Sequencing System, call Fulton Boiler Works on Tel +44 (0)117 972 3322 or visit www.fulton.com. J 48

tem, designed to increase boiler efficiency and reduce demand on services/utilities, which in turn reduces fuel, water and effluent bills. The TDS Energy Recovery System recovers virtually all heat energy from the blowdown and feeds it back into the steam system. This process raises the temperature of the feed water directly to the boiler and cold make-up to the hotwell tank. The system can also boost the boiler feed water temperature up to 100 C, which helps to prolong the life of the boiler by reducing the pressure drop and thermal shock on the pressure vessel experienced when relatively cold water is added to the boiler. For information or a quotation call Fulton on Tel +44 (0)117 972 3322 or visit www.fulton.com. J

FOOD & DRINK BUSINESS EUROPE, MARCH 2010