Spending is likely to increase

- Last updated on GMT

Related tags: Investment, Food manufacture

A small majority of food and drink firms are planning more capital investment this year than last year, according to Food Manufacture's latest annual...

A small majority of food and drink firms are planning more capital investment this year than last year, according to Food Manufacture's latest annual survey.

The 55% who predicted more spending included 11% who firmly agreed. Only 36% did not expect any increase in investment.

However, some equipment suppliers have warned that a failure by manufacturers to invest is threatening the sector's survival.

The project manager Lorien Engineering Solutions also reported a slow-down in the past year in approvals for large investments.

Lorien's md David Morris said: "Last year was a challenging year for many of our customers, which in turn meant that there were few major projects in the marketplace and an increased focus on added value." However, Lorien had seen an upturn in recent weeks.

The md of a UK subsidiary of a German equipment manufacturer blamed poor leadership and companies' restrictive approach to capital investment combined with the excessive power of retailers.

He criticised the whole structure of the industry. "You've got a lot of bean counters at the top protecting their bottom line, you've got nobody who understands the technology and you've got a lot of people who are protecting their backsides from the retailer," he said. "They still want a two-year payback or better for investment when interest rates are at 5% as they did when they were 15%."

Related topics: Business News

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