Time to invest

By Alyson Magee

- Last updated on GMT

Time to invest

Related tags Supply and demand Supply chain management Food industry

Rising labour costs and the need to become more flexible to meet changing customer demands is driving investment.

With the National Living Wage pushing up labour costs and squeezing margins further, maintaining out-dated processing equipment can be a false economy, ultimately, leading to greater losses through downtime.

Confidence to invest in new kit has been strong this year, according to equipment suppliers, with only a slight falter apparent post the Brexit vote, although future problems are expected as the UK negotiates its exit from the EU.

“There was an initial reaction of ‘let’s wait and see’ but, since then, things have picked up,”​ says Jeff Donald, account manager for Stork products in UK & Ireland at meat processing equipment supplier Marel. “There are quite a lot of concerns though.”

Chief among them are workforce availability if access to foreign labour becomes restricted and, likewise, access to poultry imports from EU countries.

Fluctuations in the sterling/euro exchange rate are a further concern, with raw materials and equipment for the poultry sector often purchased in euros.

Donald’s colleague Ross Layton, regional sales manager for Marel Meat, agrees. “People are still investing,”​ he says.

“We were a bit wary about the impact of Brexit, and the pound weakening against the euro may have stalled a few products slightly but this did not actually materialise.”

For Multivac UK, Brexit “has definitely affected some customers”,​ says Liam Smith, processing product specialist.

“Those who buy their raw materials from Europe have seen a knock-on effect with their own cash flow. However, we have achieved our budget this year and look forward to 2017 with a good order book in hand.

“We are seeing continued investment in equipment. From high-speed mince lines to low volume, high flexibility, single pieces of equipment, our spread and growth of sales has continued for our range of equipment, especially our preparation and processing business.”

Tony Burgess, head of sales and control systems at equipment supplier Proseal, says: “This has been a tremendously busy 12 months for us and we have remained somewhat unaffected by external developments.

“We have expanded our reach by taking on more foreign agents plus we are pleased to say our sales are up 25% in comparison to forecast.”

Another kit supplier, Interfood, meanwhile, reports a move away from the trend in more recent years to refurbish existing equipment back to investment in new kit.

“Many customers are adopting complete processing lines but there are still some that prefer the modular approach, which can provide greater flexibility in certain applications,”​ says Mark Bishop, joint md of Interfood.

Resource planning software (back to top)

While acknowledging recent reports that suggest investment in capital equipment is flat and that big decisions are likely to be delayed, Matthew Simpson, UK & Ireland sales manager at CSB-System, says profitable businesses are continuing to show interest in enterprise resource planning software for managing processing lines.

“All businesses that intend to survive for the long term will continue to invest, regardless of our relationship with Europe,”​ he says.

“Naturally, demand for food will continue and companies heavily focused on domestic markets will continue to service their customers.

“Multinationals, that must decide whether to invest in European or UK plants, have a bigger reason to delay decisions.”

One of the biggest drivers of investment, meanwhile, is identified as the National Living Wage, as processors seek greater automation to reduce labour costs.

“Cost increases cannot be directly passed onto the UK supermarkets and so this will drive demand for automation software and capital equipment,”​ says Simpson.

Layton at Marel Meat agrees. “Innovations that enable processors to save labour and utilise it elsewhere in their business are helping drive business for us,”​ he says.

A big focus for Marel over the last two years “is our trim management system, which is designed to analyse beef and pork trim for fat/lean ratio, and give processors the ability to manage their trim and hit their target fat percentage”,​ he adds.

According to Interfood, improved yield, reduced waste, reliability and hygiene are the four main drivers in the food processing equipment market.

“High yield has long been a vital goal, particularly in higher value meat products where reducing the amount of waste is a crucial element in maximising profit margins in what is a very competitive market,”​ says Bishop.

“Reliability of machinery is also important to minimise downtime on a production line, given the significant financial consequences this can bring – especially for high-speed lines where even relatively short stops in production can be very costly.”

Interfood supplies many major names in UK and Irish meat processing with a range of processing equipment spanning eight divisions, each offering specific capabilities and dedicated teams of engineers and support personnel.

Recent innovations it has launched include: The Schroeder Brimax for brine preparation, the Imax range of injectors and Max range of tumblers and massagers.

In regard to producing a brine of consistent quality and temperature, crucial to the quality of the end product, the Schroeder range is said to offer total flexibility and accountability alongside good build quality, hygienic design and technical advantages.

Reducing operating costs (back to top)

Meanwhile, greater functionality, flexibility, durability and reduced operating costs are among current drivers of innovation, says Multivac UK.

As well as its own manufactured ranges of inspection, labelling, automation and packaging equipment and packaging materials, the company works in partnership with Risco to supply vacuum fillers, fresh meat grinders and paddle mixers.

It has a partnership with Laska for bowl cutters, fresh and frozen grinders, emulsifiers and mixer grinders; and Schroeter for steam ovens, smoke houses and dry-ageing rooms.

Recent innovations include Risco’s combined meatball and burger-forming machine launched this year at the IFFA meat processing show in Germany. “This dual functionality means a smaller footprint requirement in factories often already struggling for space,”​ says Smith.

Laska, meanwhile, has launched the WWB300-plus, an improvement on its successful high capacity fresh and frozen meat grinder. “These grinders are able to make a significant contribution to profitability through the use of frozen meat within a processing line,”​ says Smith.

“The drivers for these developments, in common with our packaging equipment advances, are a greater need for more flexible machines that offer the lowest cost of ownership, especially minimum life cycle costs, and an economic footprint, while remaining both reliable and durable.”

Innovation in the processing equipment sector is also often in direct response to customer demands.

“Retailer demands and competition mean there is a continual drive to reduce costs and enhance efficiencies, and also a growing focus on just-in-time supply,”​ says Torsten Giese, marketing manager at Ishida Europe.

“This has led to an increase in automation throughout the packing process, with developments such as the Ishida Screwfeeder weigher.

“This has enabled the automatic weighing of traditionally difficult to handle sticky meat and poultry, and the Robotgrader, which combines weighing and pick and place technologies.

“Increased automation inevitably means less human intervention on the line. This has highlighted the need for enhanced inspection, such as X-ray and leak detection, to ensure product quality and freshness are maintained, and avoid damage to brand reputation or the costs of handling a product recall.”

Ishida’s new AirScan uses laser technology to detect even the smallest leaks, which have the potential to lead to product spoilage.

Vision systems can be used to ensure packs are correctly labelled and accurate, while Giese identifies X-ray systems as offering greater flexibility to detect contaminants and foreign bodies, and also serve as a quality control measure to identify voids or broken, undersized, missing or deformed products or packs.

X-ray systems (back to top)

Metal detection manufacturer Fortress Technology unveiled the latest version of its Halo automatic testing technology at the recent Processing & Packaging Machinery Association (PPMA) Total 2016 show at the National Exhibition Centre in Birmingham.

Estimating manual testing with a single metal detector system five times a day to cost meat manufacturers around £250 in machine downtime and testing time, Fortress says businesses can achieve payback in under 12 months by installing a new Fortress metal detector fitted with Halo 2, which is also compliant with retailer codes of practice.

“In many food production settings, as soon as one check is done, it’s time to start over,”​ says Phil Brown, Europe sales director at Fortress.

“If you factor in every production stoppage and the labour costs associated with manual testing on each production line, it soon mounts up.”

Meanwhile, at the packaging end of the processing line, “we are seeing a continuing drive towards convenience – ready prepared cuts of meats and ready-to-cook dishes”, ​says Proseal’s Burgess.

“This is leading to proactive new product development as well as competition for retail space. Machinery suppliers, therefore, need to provide solutions that maximise speed and efficiencies while maintaining product quality.”

Processors’ needs to cut costs, by reducing both wastage and operational costs, are also met by equipment that offers the added benefit of a lower carbon footprint.

“Energy consumption, traditionally very high in processing equipment because of the power required and the scale of the equipment, has been the focus of major development work for us too,”​ says Smith at Multivac UK.

“What we have now is a range of very efficient, hygienic and safe equipment that can reduce costs while maximising productivity.”

Ishida’s Giese adds: “There is also increasing awareness of the impact of food waste. It is estimated that one third of all food produced globally is lost or wasted each year, and this has particular implications for the fresh food sector.

“Packing equipment can play a vital role in reducing and minimising this waste through accurate weighing to reduce giveaway and deliver accurate portion sizes, MAP ​[modified atmosphere pack] sealing to prolong shelf-life, X-ray systems and leak detection to ensure the quality of finished goods, and vision systems to identify incorrect labelling, such as wrong sell-by dates.”

Proseal, meanwhile, has claimed a world first in semi-automatic tray sealers for skin-deep packs with its GTR-E installed on the Rhug Estate organic farm in north Wales, where it offers the capability to seal products, including joints, that sit up to 100mm above the edge of the tray.

Using the E-seal technology, a high precision, high-force electric seal system is used to create a tight and reliable seal while reducing compressed air usage by more than 90%, and delivering energy and cost savings.

While many equipment suppliers offer integrated systems across the whole processing line, complete with planning, installation and after-sales services, software providers also offer systems to integrate existing kit.

‘Turnkey solutions’ (back to top)

CSB-System, for example, offers “turnkey solutions specifically geared to the different domains of the meat industry”, ​says Simpson.

“From rearing to consumer, our customers optimally control and automate the information and material flows throughout the entire value chain.”

Reducing both labour and errors by avoiding data duplication, systems provided by CSB-System offer: tighter stock control, integrated planning and sales, and improved control of automated production lines and processes and, ultimately, performance, says Simpson.

“With the CSB-Vision product line, meat processors have full control of all crucial processes and thus increase efficiency and profitability throughout the production chain,” ​he says.

“CSB-Vision supports companies in analysing raw materials and products with regard to their quality and optimal use while reducing costs and the number of errors.”

Quintiq, a global supplier of supply chain planning and optimisation software to customers across the world, such as JBS USA and Moy Park, aims to help processors respond more flexibly to fluctuating supply and demand in the meat and poultry sector.

Its software uses algorithms and historical data analysis to predict relative amounts of meat based on cuts, quality and volume.

Moy Park is using the platform to optimise its production planning across six sites, offering greater visibility across the supply chain while reducing wastage.

“Supply and demand is always uncertain,”​ says Gijs Hofman, supply chain consultant at Quintiq. “With the meat industry a high-volume, low-value industry, the decision to decide what meat should end up in what market is the difference between profit and loss.

“The more information you can get upfront, the better you can fulfil supply and demand, and the smaller the deviation will be.”

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