Production Operations: How to Retrofit an Aging Plant

Food processors are retrofitting aging facilities to get more out of their capital budgets. But heed these "rules of retro" before you bring your plant into the 21st century.

By Mike Pehanich, Plant Operations Editor

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Every year, hundreds of food plants heed the call to expand production, improve quality, upgrade sanitation and safety or add a new line. Often all four areas are addressed at once. But when the plant in question is a little long in the tooth, it gets harder to teach old dogs new tricks.

Retrofitting an aging food plant can be problematic. Ceilings and roofs may be too low for new equipment. Flooring and walls may usher in decay. Air flow and traffic may pose chronic risk to safety and sanitation. Perhaps the plant requires all the energy of a Mt. St. Helens eruption to operate. Sober analysis may lead to the conclusion that a new plant is the simpler and, in the long run, more economical solution.

Sometimes the reason retro rules is more a matter of dollars than sense. Nevertheless, the predominant trend in the food industry is to undertake upgrades and retrofits rather than build new plants.

Most projects are driven by capacity issues and the need to expand a plant’s manufacturing capability either for volume increases or to accommodate new production lines. The prospects for retrofits and expansions climb after an acquisition when a company decides it is “overcapitalized” and prepares to consolidate manufacturing within existing facilities.

Sanitation and food safety concerns have driven many meat and poultry plant upgrades in recent years. By meeting its complex and highly challenging sanitation demands, the meat industry has set standards for plant hygiene that other segments of the food industry have adopted as well. Last year, the American Meat Institute’s Facility Design Task Force delivered “Eleven Principles for Sanitary Design of Facilities,” guiding principles for designing and maintaining cleanliness and microbiological safety in a food processing plant. (See “Blueprint for food safety,” March 2005.) The severity of sanitary shortcomings at an aging food plant, coupled with the concern over the consequences of a food safety catastrophe, may be enough to drive a major plant upgrade.

At bargain basement prices!

Other renovation scenarios revolve around the purchase of existing facilities at bargain prices. The deal may be too good to be true – and sometimes it is.

“Take an existing [food plant] structure and try to renovate it. By the time you have gutted it to get it ready for the new equipment, you have about 20 percent of the cost of the project left in the remaining facility,” assesses one engineer.

This engineer asked not to be identified because he claims he has had more than his share of bad experiences trying to fit processing operations into bargain plant purchases. “You have the structural system, the footing and foundation, columns and roof structure. The insulation is usually bad. Even the roof itself will probably have to go. Sometimes the buyer will boast that he got a great deal on the plant. Of course he did, because the plant isn’t worth anything! With all the work it takes to adapt the plant to your processing lines, you may find that you’d have been better off building a new plant.”

Still, some major processors defend these “brownfield” purchases, provided a company has done its homework.

“There are a lot of situations in which you would want to buy a brownfield plant and convert it to suit your needs,” says an engineering executive for one Top 10 American food and beverage maker. “Often you are looking for a location that gives you access to a market. And often your schedule can be a driving force. You want to get that plant up and running fast, and, in most cases, you can get an existing plant up and running faster than you can build one from the bottom.”

“Usually the decision [to retrofit] is predicated on cost and logistics,” says Chris Harmon, senior vice president and project manager for Hixson (www.hixson-inc.com), the Cincinnati-based architecture and engineering firm specializing in food. “If you have a building that can accommodate your operation, you already have your building and perhaps wastewater system and utilities – electric, gas, water – already in place. And you have workers or a labor pool to draw from.”

“Speed is one of the key elements,” adds Bill Sander, another senior vice president and project manager for Hixson. “It usually is faster to get it up and running – sometimes eight months compared to maybe 18 months for a brand new plant. And you usually don’t have as much regulatory red tape.”

Yet both admit that many retrofits and renovations can be complicated by the plants’ own histories and past trends.

Penford Food Ingredients, for example, purchased a frozen baked potato processing facility, intending to convert it into a plant for the manufacture of food-grade starches. At the outset of the project, the biggest issue became immediately clear.

“The plant had a low ceiling – 12 ft. above the floor,” says Chris Kensel of Boise, Idaho-based Power Engineers (www.powereng.com). “The roof framing was 25 to 30 ft. The equipment brought in for starch production needed a much higher ceiling. We had to remove the offices on the second story, using the entire height of the room, and remove all refrigeration units, too, because they weren’t needed.”

New flooring, walls and ceiling materials are often needed, particularly with plants – like meat and poultry facilities – with high sanitation requirements.

“What you don’t know will hurt you,” says Forrest McNabb, senior vice president-dairy and food group at Big-D Construction (www.big-d.com), Salt Lake City, Utah. “Wet environments create numerous issues — molds, mildew, rot, warpage. Once we did an exploratory on a wall in a food plant and found it full of rotted wood. There was not much holding up that wall other than the tiles.”

Another invisible issue is building code changes. “Plants think they’re OK, but they start adding square footage and you discover you now need sprinkler systems, fire walls, fire doors and more exits,” warns McNabb.

“The first thing is to assume that none of the drawings is correct,” warns Gerry Gomolka, vice president of process engineering at the Stellar Group (www.thestellargoup.com), Jacksonville, Fla. “Things either are not where they are indicated to be or there things that have been added that don’t even show up on the drawings.”

With 32 prior years as a plant engineer, Gomolka has seen a lot. He especially warns about underground utilities and systems. “A few years back I was participating in the renovation of a non-dairy plant and we kept discovering things underground. We had to find a retired plant engineer and have him walk us through the plant, marking things on the floor from his memory” – which was pretty good, Gomolka adds

Younger plants tend to make less complicated renovations.

“Most plants built in the last 10-15 years are of higher quality,” says John Schook, food and beverage manager at Carter & Burgess (www.c-b.com), a Fort Worth, Texas-based architecture and engineering firm. “They likely have pre-cast columns and pre-cast double Ts [in their roof systems]. You can make vertical drops into the process area with high ceilings -- process piping, electrical, etc.”

A good wastewater system and the ability to expand beyond the current plant constraints can be important features. Air units also can make a huge difference. These can be extremely heavy units that the existing plant structure may not be able to support if they have to be added during the project.

Often, poor initial design, failure to plan for future production, and the cumulative effect of short-term solutions make major plant projects far more difficult and costly than necessary. The consequences of failing to consider the interdependencies of a plant’s individual technological, mechanical, environmental, structural and human systems may take years to become clear. But the result of the quick fixes, Sander and Harmon say, can adversely affect plant quality and productivity and seriously impede plant expansion. They call this phenomenon “facility creep.”

The man with a plan

“I’ve built over 20 plants and managed a lot of expansions,” says another engineer from a leading food firm. “But we designed our plants to be expanded. From the time they were designed, we were anticipating adding lines, extending the plant. So our projects become more expansions than retrofits.”

And therein lies the key to a retrofit’s success -- planning. The planning that went into the last major plant design will determine the complexity and difficulty of the next upgrade. The plan for the upgrade likely will determine the quality and productivity that will flow from the plant. It will impact future expansions and renovations as well.

From the time a plant is built, it is undergoing change, evolving with market and production demands, aging, adapting to regulatory changes and corporate priorities. No change is an isolated event, but one of a continuous series of changes and decisions. Each decision ought to consider the cumulative changes in the plant right up to the present. Equipment and processing systems, the physical plant, operational systems, and employee traffic and habits all enter into a sound decision.

“The issue on renovation is ‘Do you have a facility that can continue to expand?’” says Hixson’s Harmon. “Your plan should unlock constraints that may have plagued the facility earlier. You try to get a plant that is more flexible and expandable than before.”

Plant designs have changed over the decades, in some segments quite dramatically.

“Meat plants built in the 1960s and ’70s differ dramatically from those built today,” says Sander. “A renovation on one of these plants generally requires refrigeration and air handling update, a change in floors and finished product and packaging areas.”

Dairy plants, too, have emphasized hygienic environment and absolute separation of raw and pasteurized product for years.

Sometimes processors take upgrades lightly and leave the details of execution to the contractor. Engineers universally decry this approach, and their position is not entirely self-serving.

“You want all the unknowns to be known before you go in,” says Schook of Carter & Burgess.

Planning should always start with the process.

“Identify all your needs for that process,” he says. “Raw materials processing, finished product packaging, people flows, trash flows, rework flows, etc. Understand everything in that plant and what it does.”

Analysis should include an exhaustive equipment list and documentation of that equipment and all its utility loads.

“Confirm that information. Cross-check all the equipment to existing utility capabilities and identify the shortfalls,” adds Schook. “Don’t make the mistake of calling a contractor in to start building a project. You have too many loose ends at this stage that can affect the overall design and utility systems and negatively affect your project.”

Design-build projects have flourished during the current fast-track era. But Schook says that he is seeing more design-led solutions these days in which owner and engineering firm help develop the criteria, drawings and construction documents. The owner bids the project based on the design.

“You don’t have so many cost overruns and utility systems that don’t meet needs,” he says. “Projects shouldn’t be rushed. There’s definitely a trend today toward engineered solutions.”

Project planning should consider all areas of potential benefit, even those beyond the needs driving the project. Safety, quality and other upgrades can be made at a fraction of what they might cost later and may even pay for themselves in savings, insurance costs or prevention.

“When you renovate an older facility, you want to put it to a higher standard,” says Sander. “You try to set a level of quality the rest of the plant should be elevated to.”

Don’t slow me down

Perhaps the biggest consideration of a retrofit of an up-and-running processing plant is what impact the project will have on production.

“You plan your downtime,” says our Top 10 company engineer. “You minimize it by scheduling deliveries and disruptive work for the weekends or shifts when the plant isn’t running. Sometimes you have to prebuild inventory to offset for lost production. Again, you plan.”

Contractors and materials suppliers have to be flexible with their deliveries and work hours to accommodate production needs.

“You have to be aware that tracking in equipment and materials, loosening particles and creating dust can contaminate the processing area while you are renovating,” says Bob Hendon, president of the Cincinnati-based design firm Hendon & Redmond.

Simple common-sense principles apply. Temporary walls can separate areas under construction from processing areas. Work is best executed during non-production hours, where possible. Overhead work, such as ceilings, piping and other utility measures, must be done during non-production hours.

Sanitation teams must be informed of the work as well and understand the implications for their function. End-of-week sanitation may have to be replicated on Sunday night or Monday following a weekend of construction.

Plant air flow is critical and must always factor into planning. Dirt and dust can easily migrate from construction to process areas.

“Improper ventilation also can create problems of condensation and refrigeration,” says Hendon. “Sometimes you don’t feel you have sufficient refrigeration capability in the summer when you are actually pulling in and refrigerating hot air. The real problem may be your ventilation.”

Sometimes it’s a question of what affect production people will have on the renovation. “You have to watch out for the plant ops people when you renovate,” Gomolka warns. “They’ll want to take care of 50 years of past sins when they see you renovating. Of course, you want to do all you can for them on-site, but that makes it tough to maintain the project’s focus and the budget.”

Cost and guarantee

Accommodating production schedules can make planning challenging for contractors, equipment suppliers and other project players. It can be particularly difficult with fast-track projects.

Often new orders or changes in the production schedule can close the small windows of time available to construction and materials delivery. Around-the-clock construction may be necessary when opportunity for extended work is limited.

All these considerations can push back project delivery schedules and cause cost overruns. Contracts and expectations may need to be adjusted to the vagaries of a renovation in an active processing environment.

It all comes back to planning and analysis, knowing your operation, peering into whatever crystal ball you have at your disposal, mapping a detailed and comprehensive decision tree to handle whatever arises.

Anything to narrow the odds of success.

BUILD NEW OR RETROFIT?

The advantages of building new are many. Starting from a blank slate allows a knowledgeable team of designers to create the plant with the advantages of latest materials and equipment and the experience of prior successes and failures serving as a guide of what to do and not to do.

Retrofitting a plant poses a lot of difficulties, from accommodating production during construction to inheriting all the problems of age and out-of-date concepts, materials and equipment. Still, the potential advantages of lower cost and faster delivery usually outweigh the long list of pluses on the “new plant” side of the comparison during this era of tight capital budgets.

Here’s a side-by-side list of the pros and cons of building new and retrofitting your food plant, provided by Jeff Johns, vice president of Shambaugh & Son (www.shambaugh.com), Fort Wayne, Ind.

New Plant Retrofit
A new plant generally delivers what is really wanted and needed. Unused and depreciated assets can be utilized.
Built-in expansion and flexibility can be part of the design and strategy. Maintenance of a local brand equity can continue.
Demographics and efficiencies can reduce labor costs. Employment of experienced work-force can continue.
Technology, newer infrastructures, efficiencies, and employee working conditions can reduce unit costs. Existing technology may be updated.
Can reduce employee exposure to ergonomic illness and occupational accidents. Continuation of local relationships with customers, suppliers and regulators can occur.
Reduced logistics costs. Shorter start-to-finish schedule.
Increased product quality potential. Lower project cost generally.
Possible municipality and state tax incentives and subsidies. Production can be greatly impacted during cut-ins and could require strategic marshaling, heavy inventory/storage costs or co-packing.
Can consolidate production of multiple plants more easily. Cut-ins and demolition pose threats to product and occupational safety while plant continues to operate.
A more modern, better-looking facility. Egress is generally interrupted and area isolation may be necessary.
No production time disruptions. Facility could have limited expansion space, be land-locked or heavily regulated.
Opportunity to create a state-of-the-art, showcase plant. Facility may require additional engineering for proper documentation prior to project.
Plant may be subjected to higher standards due to loss of regulatory grand-fathering. Unanticipated hidden conditions may be discovered in demo/construction phases.
Longer start-to-finish schedule likely. Adverse materials generated by construction.
Higher costs. Requires modification, training and consistent monitoring of GMPs, sanitation, documentation and production scheduling.
Relocated equipment may pose challenges. Budget should have higher level of contingency funds for delays and unanticipated difficulties.
   

 

Transactional growth over 30 years
“Facility creep” can result in hot spots: 1. mechanical equipment spaces are inconveniently situated in remote areas; 2. product quality is affected by disjoint processing and packaging; 3. future processing/packaging growth will result in second relocation of parking lot and inefficient flow; 4. future growth of the shipping cooler will require an interruption to shipping while dock is relocated.

 

Generational approach
This approach allows efficient operation and room to grow: 1. plant utilities are centralized in a single area; 2. converting an existing cooler space into packaging allows expansion of processing and packaging while maintaining production in a single/contiguous space; 3. future processing/packaging growth can be added without disruptions; future growth will not disrupt shipping operations; 5. office expansions have been anticipated.

 

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