Total Construction's Rob Blythman explores the pros and cons of building a new ready meal facility versus refurbishing an existing one.
One of the best things about building or refurbishing a ready meal facility is the ability to design it to suit your specific needs – but there's also a downside we builders call 'scope creep', which can typically occur when wants take over needs.
It's worth noting however that there's no right way. The reasons for either constructing a new building or refurbishing an existing site can be numerous.
The key is to understand and stick to your main business objectives and weigh up the pros and cons of both options through detailed pre-planning and design according to your own particular scenario before diving into any large financial commitment.
To this end, here's a quick guide to the pros and cons of new facilities compared to refurbished sites.
REFURBISHING
The pros:
• Refurbishing an existing site, or Brownfield site, ?has its advantages, in particular if it’s your current location. Maintaining a location and the retention ?of staff is crucial to many businesses.
• A Brownfield site can also allow you more scalability to match your budget and a relatively fast ramp-up period on production. Reusing existing services can also come into play, which can reduce the building cost significantly, although it depends on how ambitious your expansion plans are.
• Other advantages include speed at which works can commence, particularly if the site is already fit-for-purpose as a food production facility. ?Altering and adapting the existing cook and assembly areas to High Care can be fairly straight forward, dependent on the existing layout, with ?a few key hygienic additions.
The cons:
• The downsides of refurbishing a facility are numerous, including over-capitalisation in the premises, size limitations of the site, street access issues, and in some circumstances bringing a building up to Building Code of Australia standards.
• Also, adding more production capacity or upgrading the facility to a High Care operation requires increases in services that the current facility may not be able to provide, potentially resulting in expensive additions such as power supply upgrades, waste water retention systems, drainage, and a stronger roof structure. The term ‘opening up a can of worms’ can quite often be ?the case once you start to delve into an existing building’s substructure and services.
• Adding floor drainage, for instance, can appear straightforward but a double-up of drainage channels may see the floor in your facility looking like Swiss cheese, and in some instances may require a complete new slab to be re-laid.
• Disruption to production can also be a major concern, so having a builder who understands workflows and production requirements is important.
• Thorough pre-planning and pre-design works can save a lot of cost blowouts when adapting the facility to satisfy the High Care food production’s strict hygiene requirements.
NEW BUILDING
The pros:
• With a new build you have the ability to design for current and future growth and accommodate ideal process flows, for instance through a straight line configuration and maintaining services to one side ?of the building, allowing for maximised savings in design and allowing for easier future expansion.
• Building a brand new facility can also send the right message to the market about your strength and commitment to the industry.
• A new building, or Greenfield building, is also an advantage in that it can be completed with zero impact on your current production capacity.
• Another major and sometimes forgotten advantage is the ability to abolish bad practices and habits in your processes. These problems can be very easy to get rid of when transplanting operations.
The cons:
• The downside of a new build includes finding the right site in terms of both size and location, along with the time it can take to get all the regulatory and council approvals sorted out.
• A particular problem to consider is the size of the property, as typically industrial sites under 3000sqm can be hard to come by – so you generally need to look at a larger site than you may need right now.
• Because sites over 5000sqm do have better resale value, they are more sought after by many different industries. Unfortunately many of the sites available are on the outer of the metropolis, so getting staff to travel to the site can be difficult and the pool of local candidates can also be limiting.
• Many client supply contracts are time-pressured to ramp up quickly. When building from scratch this can pose a problem due to time delays in preliminary planning and approvals.
Rob Blythman heads up business development in food and beverage at Total Construction. He can be contacted at robblythman@totalconstruction.com.au.
