Manufacturers boldly go into new investment territories

By Rod Addy

- Last updated on GMT

Related tags Investment Capital accumulation

Manufacturers boldly go into new investment territories
Processors are braving the harsh economic climate to undertake big capital investments to increase their capacity, which reflects the results of Food Manufacture's 2011 survey.

Kraft Foods is splashing out £9m on updated coffee extraction technology at its Banbury factory in Oxfordshire. The project begins in October. Plant director Christine Bense said it would deliver "significant sustainability benefits and sizeable cost and inventory reductions".

Malt and fruited loaf supplier Soreen has completed the merger of its two bakeries at Trafford Park, Manchester. "We have got some more capital expenditure, so there will be more investment in new product development,"​ (NPD) added md Paul Tripp.

Soreen launched its Banana Loaf, which Tripp said outsold Soreen's other fruit loaves 2.5 to one, and Apple and Sultana Loaf, last year. It plans to launch a malt Toastie variant this autumn.

Wright's Pies has opened a £1m, 1,858m2​ dry goods warehouse featuring computerised stock control at its Crewe bakery to support expansion across its three operating divisions: bakery; retail and quality foods. The centre will handle more than 400 tonnes of raw material a week.

Meanwhile, baker Greggs's £40m projects to construct a confectionery centre of excellence at Penrith, Wales; new build bakery at Balliol Park, Newcastle; and bakery at Solstice Park, Wiltshire, is on target.

Warburtons and Seabrook Crisps, two firms with traditional strength in the north of England, are boosting UK-wide production. Seabrooks has spent a six figure sum on equipment in the past year to improve efficiency and boost production to support its nationwide expansion and growing business with retailers.

Warburtons is on schedule to complete a £25m refurbishment of its Bolton bakery following a fire last summer. The development could quadruple capacity at the site and the baker is planning to extend its NPD.

These developments reflect this year's Food Manufacture survey. Over half (54%) of respondents said they were planning more capital investment this year, compared with 50% in 2010. And more than a third said they would take on more staff, against just over a quarter in 2010.

However, the previously outlined investments almost exclusively concern branded manufacturers. The survey covers a mix of branded and own-label respondents and while, in general, growth plans are more substantial than in 2010, morale has fallen.

Almost a third said they felt less positive about their business's future than a year ago and 38% did not expect profits to improve, up from 28% in 2010.

Related topics Ambient foods Bakery

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