Designing and building a facility in Asia: What you need to know

Australian food and beverage manufacturers open processing factories in Asia for many different reasons – cheap labour, being closer to markets, lower running costs.

Wiley is a company that has spent many years building up its portfolio of building projects in Asia – Thailand and Indonesia  are just a few countries where they have built facilities for a variety of FMCG food specialists. Wiley’s first Asia project was 1995 for Nestle Indonesia, who where going through an expansion phase on several sites in East Java – a condensed milk factory was built quickly followed by a Milo factory and then by others including factory upgrades and central distribution centre.

Wiley brought some innovations to their projects, which provided better hygiene controls, sped up construction  and reduced ongoing maintenance. An example of innovation was concrete tilt-up walls to a warehouse which made construction faster and eliminated the maintenance of repairing plastered blockwork.

After its start in Indonesia, Wiley designed some ‘signature’ facilities in the Philippines, particularly a large commissary for leading Filipino fast food company Jollibee.

There are many preconceived ideas – some true, some not so much – when starting up a factory in the most populous continent on the planet. For a start, there are still standards that have to be met. Maybe they’re not as stringent as those in Australia? Not necessarily so says the company’s advisory services director, Andrew Newby.

“We build to international standards or specific client requirements when building overseas,” said Newby. “A country like Thailand considers itself the kitchen of the world. They export to Japan, Europe and all over the planet so they have to meet high standards. You look at the workmanship level when building in Asia – the finishes – as to being similar to Australia. We look at how they might improve the way they do things, and, in some cases, we do have a lot of supervision when building as to how they carry out tasks. I find that supervision is a really strong factor in achieving great finishes.”

Wiley business development manager, Michael Fung, backs up that assertion. “When starting a project, I would advise to have somebody up there who can manage the delivery. Having an Australian supervisor is a good idea,” he said. “If you leave all the dealings with a local contractor you don’t know what you are going to end up with.”

Dealing with local government can vary from country to country. While there might be an impression that a lot of these places have third-world infrastructure, they still have construction standards that have to be adhered to, licenses that have to be put in place, approvals and other bureaucratic necessities that must be met. A key factor for food and beverage processors have to take into consideration is risk. What are the local issues? Is the government reasonably stable? Is the workforce reliable? What are the local labour laws and how will they affect my business? Fung also says that sometimes companies get caught up with the setting up and forget about the commercial aspects.

“You have to look at how they operate,” he said. “Things like bank accounts, what you need to have in place before you even go over there. Take Indonesia and Thailand for example. The differences doing business in those two countries is significant. There are differences in paid-up capital requirements to setup business. Then there are business set-up costs. It is that up front advice that they need to get from lawyers and accountants before they get their foot in the door of the country that needs sorting out and we often assist with.”

Is it easier doing business in one country compared to another? Yes and no, says Newby. It’s more to do with how the country sees itself with regard to food manufacturing than any clear set of rules designed to make things easier or harder for the companies involved.
“It is about making sure you are ready,” said Newby. “For example, Thailand has a very active board of investment. They will give you a lot of help to set up a new business. Whereas you might not get that in Indonesia because they are not such an export-driven country. So, it’s important to look for incentives.”

Then there are the reasons a company is going there to Asia in the first place. Is it to export back to Australia? Export that country’s produce around the world? Depending on what you are going to do relates to which is the best country to erect a factory.

“It’s all about supply chain,” said Newby. “It’s about what you are making. Is your raw material available in that country? Because every country is different. What are you producing? Does it make sense to build in that location? If you’re not really sure then we can help a client decide the geographical location within Asia where it makes sense to be. You have to also look at where ports are located, airports – things like that.”

Wiley is a company that has many years’ experience building facilities on the continent. This experience can go a long way to helping companies just starting their journey in Asia, especially when it comes to scoping a new project.

“It is important to get a company, or someone, with experience building facilities there,” said Wiley communications manager, Rachael Hedges. “We can start right from the beginning through our business advisory unit – from identifying what country you should go into. What is the business risk? What is the business position for going there? We make sure there is due diligence and that the company’s future planning is in the right spaces and places. Then our delivery team can partner with local suppliers and subcontractors and make sure they are getting the right advice to get the right outcome.”
And how are things looking there at the moment? Wiley is at pains to point out that the whole region – depending on wants and needs – is open for business. However, the big player in the arena – China – is never far from anyone’s thoughts. Still, opportunities abound everywhere said Newby.

“The areas that I’ve seen pretty good growth in are the Philippines, Vietnam and Indonesia,” he said. “With Indonesia for example, it has got a population of 230 million. There is a really strong domestic need for food there. Whereas Thailand has 60 -70 million people but is a big exporter because the government has been very proactive in supporting the food industry. Some Asian countries are building strong connections to China.

“As the infrastructure gets better in Asia, it is going to open up. You are then going to see more trade, which those governments are trying to do with the ASEAN (Association of South-east Asian Nations) agreement – trying to break down trade barriers in the region so labour and goods can cross borders easily.”

How does Newby feel about the near future with regard to growth, especially for Australian companies thinking of dipping their toes in the food and beverage processing market?
“Some economists say that at the moment the Asian economies are sluggish, but this view only makes sense when compared to the double-digit growth that the region experienced in previous economic cycles,” he said.

Growth rates in the ASEAN area for example are still forecast to be somewhere between 5-9 per cent in 2019 and when combined with the big populations in Asia, it is unlikely that demand for high quality food and beverages will be declining anytime soon.

SunPork Group future-proof Swickers Kingaroy bacon factory

The SunPork Group is partnering with Wiley to upgrade and expand their processing capacity at the Swickers Kingaroy bacon factory by early 2019. The new slaughter room on the western side of Swickers’ site is a $60 million greenfield expansion that will further establish the business as the largest pork processor in the state.

As the largest employer in the South Burnett region, this expansion is a significant investment in the community’s future. Swickers currently processes over ninety per cent of the pigs processed in Queensland, and this expansion will allow the broader pig industry in Queensland to grow with the increased processing capacity. Swickers is the only export accredited pig abattoir in Queensland and their quality pork is much in demand by local and export customers.

Wiley has been engaged on both the design and the delivery of the project and will be working with local suppliers to deliver the project. Wiley Senior Project Manager, Greg Lynn said, “I am looking forward to delivering this project for Swickers with local suppliers in the South Burnett region. This project has been a vision of the company for some time and I am excited to be helping them to realise it.”

Wiley Managing Director, Tom Wiley said, “We are proud to be designing and delivering this facility for Swickers to enable them to respond to demand while also being a huge investment in the community. I am excited to be working with a company who shares our community values and bringing their project to life.”

Wiley has been collaborating on the design with Swickers to ensure their facility upgrade is state of the art and future proofed. While not required immediately, the new plant will be capable of processing at three times the speed and overall volume of the current plant. Wiley will be delivering; complete slaughter floor, freezer, chillers, amenities and offal rooms. The 4700m² project will take approximately 12 months to complete.

New extrusion mill for Ridley Corporation

Ridley Corporation continues its path upstream, with the announcement that Wiley will take on the responsibility of design build partner and principal contractor for its new extrusion mill project in Westbury, Tasmania.

The new state of the art, purpose built mill, will have an annualised capacity of up to 50,000 tonnes per annum, on-site bulk storage capacity and fit for purpose warehouses for both raw materials and finished goods. The Extrusion Mill will manufacture and supply feed primarily to the salmon industry, as well as other aquaculture species in Australia and in New Zealand.

Wiley have been engaged by Ridley to design and construct the Extrusion Mill and the duo have been working together on the design of the facility over the past year. Following the recent Development Approval for the project, the collaboration will continue through the construction phase on to a fully operational facility.

“We are proud to collaborate with Ridley on this fantastic project. It’s great to work with a company that shares similar values to our own. Our commitment to Ridley and the broader aquaculture industry is to deliver value at every stage of this project and unlock a new level of commercial possibilities for the industry in doing so,” said Wiley Innovation and Strategy Director, Brandon Miller.

The new extrusion mill will add to Ridley’s already strong position as the market leading producer of high quality animal nutrition solutions. This modern processing facility will incorporate the latest technologies from around the world and provides the industry with a wide range of benefits. These include a greater capacity in shorter lead times and the ability to collaborate more closely on new product development and dietary enhancements.

“We’ve been a part of what is going into the design and engineering of this project and it is truly world class. It’s due for completion in 2019 and it is now our job to bring it to life,” said Miller.

Preparation key to building success for food making facilities

When pie manufacturer Baked Provisions wanted to design a new facility in Western Sydney, it had to make sure that not only was the budget met, but it would have a building that would meet its operational needs and capital constraints. Luckily, Total Construction was able to meet both these requirements.

When building a new facility, a food manufacturer knows that such a capital investment of a bespoke building can be a costly affair. Baked Provisions knew this, so they knew they needed a company that would not only build a quality facility to its specifications, but would do so within its budget.

Total Construction is a company that specialises in building commercial facilities that are designed to give clients the best value for money, and to make sure that the finished product meets the operational needs of a busy, modern enterprise.

Total knows the key to a successful project is to make sure the client involves a builder early on in the process.

Baked Provisions’ management team embraced this strategy and it wasn’t long before the company started helping the Prestons-based bakery conceptualise and design the project from the ground up.

Early Contractor Involvement

“Commonly known in the construction game as Early Contractor Involvement (ECI), having a builder involved during the scoping and design stage can allow critical cost items in any build/ fit out be identified and alternatives discussed,” Total Construction’s national business manager Rob Blythman told Food & Beverage Industry News.

“For instance, you may have a plan to construct a mezzanine level in your operations. Although perfect for the intended process flows, it can be extremely costly to construct.”

Blythman pointed out that sometimes clients cannot see the forest for the trees. They are so entrenched in their business they only see one aspect of the project, such as increasing efficiencies in their production.

“Involving a builder with process engineering capability in the food and beverage industry, such as Total Construction, can allow different eyes to see the requirements and suggest alternatives to the building layout that just don’t reduce the need for costly building works, but can potentially improve the process flow overall,” he said.

How does ECI work to help companies like Baked Provisions meet their budget?

The first step is a site visit, or investigation, which is carried out by the builder. This is similar to scoping a site. Total Construction looked at the existing site and the blueprint of the new facility. This allowed it to see all the services Baked Provisions would need in order to have an efficient operation.

The company also took stock of what utility services were available at the site. The Western Sydney industrial estate where the facility is located was fairly new so it was important to make sufficient services were available (i.e.. gas and electrical capacities). This is something that some businesses forget to do. Not only do you have to make sure the services are available, but increasing power or gas supply to a site can be very costly to the project and create delays.

Another area that needs consideration in the case of an existing building to be fitted out, is the structure integrity. Having to strengthen this to cope with the additional weight of fit out and services can often blow out project costs.

Getting stakeholders together

“A workshop was carried out with all stakeholders to identify required efficiencies, confirm proposed outputs and flag any potential limitations,” said Blythman. “As part of this workshop all production processes were mapped and detailed for both the existing and proposed operations. A comprehensive list including capacities and dimensions of all equipment both existing and new was developed. This helped to identify all utility services required and set the benchmark for power and gas requirements at the proposed site.”

One of the main reasons for being so comprehensive in the planning stage is, again, to save money for the client. It helps identify potential bottle necks in current processes and highlights any hygiene requirements in the new fit out, something that is a key ingredient in the food and beverage industry. Getting all this data captured was critical in maximising efficiencies of the new facility.

Once all these things were scoped, the Total Construction team got to work on the practicalities of the build for Baked Provisions.

“A review of the build-ability of the facility was done and sketch design layouts were completed to optimise process flows to best fit the client’s objectives,” said Blythman.

“A building/fit out SWOT (strengths, weaknesses, opportunities and threats) analysis was carried out and build/ fit out costs were derived. Through consultation between ourselves and the client this process allowed savings to be identified early on in the overall design and layout of the facility.”

When Blythman talks about a detailed design, this includes all the services and other requirements, which is then put to the market for live market costing. This was so the client could get a firm understanding of what they could get for their dollar. It was at this point that the building of the facility was finalised.

“Here is where working to a budget comes in,” said Blythman. “Once the ideal building and fit out costs are established, it is then possible to derive further reductions in the overall project spend through rationalising the design. This included, but was not limited, to reducing the number and sizes of rooms, freezer/cool room capacities and locations, and finishes in the design.”

He said that this could be done while keeping future expansion capability intact in the design and maintaining the client’s required production output for their new facility.
Total Construction knew that a key to the success of the build was making sure it met Baked Provisions’ needs, as well as giving them the best advice during all stages of the project.

The new facility will make Baked Provisions' range of pies, savoury items and cakes.
The new facility will make Baked Provisions’ range of pies, savoury items and cakes.

The building journey starts early

When it comes to building and design, food businesses can minimise the possibility of problems and defects by working with builders through the planning process. Total Construction is well-equipped to take them on this journey.

Plant building and design – just like lean manufacturing, automation, and food safety – are critically important for food and beverage makers. Having a well-designed, well-functioning manufacturing plant is crucial to their success.

So when these businesses are looking to either construct a new facility or upgrade an existing one, they need to find a good builder. On top of that, according to Rob Blythman, business development manager – food & beverage at Total Construction, it is important they find someone who is willing and able to work closely with them.

“The client is key in deriving the ideal design and process flow. We involve all stakeholders (including chefs) from the client side to develop the design and layout that fits perfectly with their operational needs,” he told Food & Beverage Industry News.

“Total Construction likes to become part of the client’s project team as early as possible, and not be just a ‘supplier’ of services.”

The company prides itself on the “value add” it can provide to clients. It doesn’t just do the building but provides full design and process engineering services. According to Blythman, medium-sized businesses in particular are attracted to this model.

Total Construction

Total Construction was established in 1995 by current directors Steve Taylor and Bill Franks. From this time, when it operated out of an 8m² office in Sydney’s Wetherill Park, the company has grown to the point that it now has three state offices, employs 120 staff, and has an annual turnover of $150 million.

The food and beverage sector accounts for about 20 per cent of the company’s work. Apart from this, it also operates in the aged care, hospital, industrial, renewable energy, and education sectors. Within the food and beverage sector, most of its clients are medium-sized business with an annual turnover of $10 – $30 million.

“Having process engineers on staff and our experience in live food and beverage projects puts us ahead of run-of-the-mill builders,” said Blythman.

Total Construction has extensive expertise in delivering food and beverage projects throughout Australia.
Total Construction has extensive expertise in delivering food and beverage projects throughout Australia.

 

 

On top of that, where necessary, Total Construction works with other businesses on construction projects. To date, these partners have included Beca Engineering, Northrop Engineering, MCHP Architects and more.

The company has extensive expertise in delivering food and beverage projects throughout Australia. Its capabilities in the industry include cost planning, design, construction, and fit-out. On top of that, there are plans to soon add “asset management/equipment supply” and “install” to this list.

To date, Total Construction has completed projects in the beverage, bakery, dairy, and meat sectors. One of its major clients has been Alpha Flight Services, an in-flight catering provider owned by Emirates Airways.

Projects for Alpha have included design and construction of  extensions and the construction of a new catering facility at Tullamarine Airport in Melbourne; construction of a new flight catering facility at Sydney Airport; roof replacement and refrigeration of the production area at Alpha’s facility at Brisbane Airport; design and construction management of a new purpose designed in-flight catering facility at Adelaide Airport; construction management of new extensions at Perth and Brisbane Airports; and construction of a new flight catering facility at Cairns Airport.

Total Construction’s clients in the bakery sector have included the likes of Goodman Fielder. One notable project for this client, “Project de Vinci”, involved upgrading works and management of plant and equipment installations at an existing facility in NSW.

Also in the bakery sector, Total completed the design and construction of a new Tip Top bakery facility for George Western Foods in NSW.

The total package

Rather than taking a one-size-fits-all approach to building projects, Total Construction tailors services to clients and offers a range of project delivery models. Experienced at working in “live environments” (i.e. operating factories), the company knows how to take the necessary precautions to eliminate safety risks as well as minimise noise, dust and vibration.

With every project, the company looks for innovations to improve “buildability” and offers value engineering solutions, where possible, to ensure the best possible outcome for clients. It values safety in design as a top priority and takes the responsibility to raise safety issues throughout the course of construction and suggests methodologies to reduce them.

In other words, as the name suggests, Total Construction delivers the total package. “Our key positioning is we are not just a builder, but a solutions provider for the food and beverage industry,” said Blythman.

The company’s client retention rate of 80 per cent suggests this approach of value add, communication with clients and starting the building journey early is just what the food and beverage industry is looking for.

Built for success – plant design in the food & beverage sector

Plant design should be one of the first things food makers consider when looking to maximise operational efficiency. Getting the right design is all about asking the right questions.

Torino Food Service, a growing import and distribution business, recently consolidated its operations into a single facility at Ingleburn in South-Western Sydney. Previously, the company’s operations had been spread across multiple sites.

At the time, the company forecast that the relocation would result in a three per cent reduction in running costs per dollar of sales over its whole operations, as well as an additional 12 per cent reduction in servicing costs on associated equipment.

The move, in other words, was well worth the effort and goes to show that operational efficiency isn’t all about supply chains, management expertise, lean manufacturing, automation and a well-trained workforce. While such factors are crucial, having a well-designed, functioning plant, plays an important role in bringing them all together.

Vaughan Constructions

Torino’s new facility was built by Vaughan Constructions, a company that is known for specialised design and construct, particularly of medium to large scale  complex facilities.

Established in 1955, Vaughan built its first facility for the food and beverage sector over 35 years ago.

Initially, the company worked for drink producers. “We designed and built production facilities for brands like Patra and The Original Juice Co. They’re brands that have been around for a long time,” Vaughan’s Managing Director, Andrew Noble told Food & Beverage Industry News.

“Nowadays our clients include all spectrums of the food and beverage market, from soft drink to juice, the full range of dairy products, right through to all of the bakery and protein class of foods.”

Noble said that the fast-changing nature of the sector makes it an exciting one to be involved with. This pace of change is not confined to product development. “The technology on the production is also evolving,” he said.

This has implications for the buildings needed to house that technology. “It means, for any building, what we did yesterday isn’t necessarily the complete answer for tomorrow,” said Noble.

According to Noble, Vaughan is able to keep up with these changes by partnering with clients over many years and integrating specialist consultants where required.

He said that the relationship with clients is paramount.

“The most important thing for the client is that they have a single point of contact that they can trust. That’s critical because they have to look after their core business,” he said.

“We make sure that the right questions are asked right from the very beginning. We will gather all the necessary information, and provide options. The client gets the opportunity to evaluate the balance between  performance improvement versus capital investment.”

Noble added that Vaughan’s value management processes have a track record of delivering substantial project savings for clients. “Figures of 15 – 20 per cent improvement on the bottom line is not uncommon,” he said.

ASRS warehouse

Vaughan built an automated storage and retrieval system (ASRS) warehouse for PepsiCo in the Adelaide suburb of Regency Park . The facility (pictured above and below) is dedicated to the company’s Smith’s snack foods brand.

Image 1

“It’s the first fully automated plant that we’ve put into Smiths and it was done to drive improvement,” explained Steve Reilly, PepsiCo’s Australia & New Zealand’s Senior Engineering Manager.

“It’s allowed us to store more product at our manufacturing site. It’s allowed us to deliver to the central warehouses of our major customers, like Coles, Woolworths and Metcash. And it’s allowed us to better facilitate that delivery method.”

On top of that, the automated facility has helped the company minimise labour costs.

Reilly said that PepsiCo decided on a height of 30-pluse metres for the warehouse and added that, for a building of that height issues such as wind loads and seismic events have to be taken into consideration.

In addition, he said, there were some complications at the site.

“It was deemed that – given the soil substructure – we needed to do a little bit more in our foundation work…to ensure that the slab that was put on top of that was going to meet the specifications of the automation company,” he said. “So the floor needs to very flat and it needs to stay flat over a long period of time, otherwise there would be the potential for the automation to go out of kilter.”

“So they had to work to some pretty critical specifications and I thought they did that pretty well,” he said.

Seamless factory warehouse

Langdon Ingredients is a family business established way back in 1852. With operations in Australia, New Zealand, South East Asia, UK and South Africa, the company is a supplier of food ingredients and value added services to food manufacturers.

“Vaughan recently completed stage seven of our main facility in Melbourne, which we started ten years ago and this is the final addition to the site,” said Chris Langdon, Managing Director of Langdon Foods.

“The last stage was a client and humidity controlled warehouse that was of a specialist nature and in combination with ourselves they selected the appropriate contractors for the specialty works.

“It all connects and now works as a seamless factory/warehouse under one roof.”

Contracts

There are three main types of contracts used in the building industry.

The first type is a “straight tender”. In cases where this type of contract is signed, the client is responsible for all the design documents.

As Noble put it, this can pose a risk to the client  where, in extreme cases,   if the drawings show the doors in the building  but door handles aren’t nominated, they will be built without handles.

The second type of contract is the “Design and Construct” contract. Using this methodology, the builder is responsible for the design and gives a price to the client for the entire design and construction process which is generally based on a performance brief. If there are no door handles on the drawing, it is the builder’s responsibility to include them if they’re required.

The third type of contract is called “Early Contractor Involvement” (ECI). Using this methodology, the builder comes on board when the project is at an embryonic stage and takes full responsibility.

According to Noble, ECI is a methodology that more and more clients, particularly in specialised industries like food and beverage are adopting.

“If I were to predict the next twenty years I’d say 75 per cent of specialised projects will be completed under an ECI methodology,” he said.

“It allows the client to tap into the latent knowledge, resources and specialisation within the organisation they’re partnering with. The client maintains visibility of the pricing and as much  control as they desire.”

In a fast changing, dynamic industry like food making, this is invaluable.

“With an ECI methodology the clients can actually stress test where things are at throughout the process before they’re over committed,” said Noble. “So they’ve got the option to either turn back or to change tack..”

These are great advantages for any business looking to maximise operational efficiency.

Wiley awarded Singleton regional livestock market tender

Food industry design specialist, Wiley has been awarded a construction tender for the Singleton Regional Livestock Market upgrade.

Wiley will undertake a range of works including installing a roof over the Northern Yards selling area, upgrading walkways to comply with structural standards, updating onsite services and amenities such as electrical, hydraulics and fire services, installing rainwater harvest tanks and upgrading the intersection leading to the Gresford Road facility.

Michael Johnsen MP, Member for Upper Hunter, announced the tender result.

“Beef production is big business in Singleton for both our local famers and suppliers, and the wider NSW economy,” Johnsen said.

“This upgrade will allow the Singleton Regional Livestock Market to meet the current demands of local beef producers and provide the infrastructure for the growth of this vital industry.”

Wiley Managing Director, Tom Wiley said the company was proud to be supporting the upgrade and helping secure the future of the agricultural community.

“We are looking forward to the construction phase and working closely with the local community,” he said.

The NSW Government provided $6m in funding for the project under the Restart NSW Resources for Regions program, which aims to support regional communities that are related to mining. In addition, Singleton Council contributed another $1.73m.

Construction works are expected to commence by early May.