Increasing bottom line profits by improved service efficiency. Foster s Australia

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1 Increasing bottom line profits by improved service efficiency Charlie Foxall * 1, David Sudarmana 1, Paul Brodie 1 Foster s Australia Abstract Breweries rely on an assured supply of essential services to produce their products. Water supply, fossil fuels and electricity are traditionally regarded as readily available consumables that are secondary to real raw materials like malt, hops and packaging materials, while liquid waste discharge is regarded more as a nuisance rather than a potential source of energy and service water. There is a world wide push for environmental sustainability in manufacturing to ensure the long term viability of our businesses, our lifestyles and possibly our species. At the Foster s brewery in Yatala we have been implementing strategies that have led to us being at or near world s best practice in all our essential service usages. Throughout this process there have been few, if any, improvements that have not had a financial pay back that justified the expense without any reference to the environmental benefits. Environmental responsibility has proven to be sound business and economic practice. KEYWORDS: environment, sustainable development, water, essential services. Introduction Brewing and Packaging product are the two traditional areas of focus in relation to continuous improvement efforts for most breweries. The senior roles in a plant are generally related to these activities and the kpi s of senior people inevitably will get most attention. We are all familiar with efforts to improve extract efficiencies, packaging line efficiencies and reducing waste wherever possible. Millions of dollars can ride on getting these things right. Services are regarded as a means to achieve these goals. Brewing and Packaging beer require the consumption of energy, either as electricity or burning of fossil fuels, CO 2 is required for carbonation and oxygen exclusion, water is required for product, cleaning, steam production, cooling towers and other uses and finally liquid waste streams have to be managed as they leave the brewery site. It is fundamental that if a brewer turns on a steam or water valve that the steam or water must be available for them to use, and this requirement for availability has, at times stood in the way of improving service efficiencies. Foster s has, over the last ten years, achieved significant savings by concentrating on the value available in optimisation of service use and recovering energy and resources from traditional waste streams.

2 Foster s Yatala Brewery, with a nominal capacity of 5.5 million hl, has been able to reach a level at or near world s best practice in water, waste and energy usage. It has been able to reduce green house gas emissions per unit of production by almost 30%, has made significant reductions to its environmental footprint and has achieved major cost savings while at the same time expanding dramatically in volume and complexity. These steps towards ecological sustainability have also resulted in considerable economic saving, indeed few have not been justifiable on purely economic grounds. Foster s Yatala Brewery The brewery at Yatala was originally built to produce beer for the Power Brewing Company (PBC) and was purchased in 92/93 by Foster s. At that time the brewery was reasonably efficient by world standards and significantly better on most kpi s than other Foster s breweries. With that change of ownership began the process that has led to the brewery s current position. The first step was related to waste water discharging to the local council sewer system. The Yatala brewery is located on a 30 hectare block in the Yatala Enterprise Area just south of Beenleigh, about half way between Brisbane and the Gold Coast. The site is well served with infrastructure and located on the M1 freeway giving easy access to most Australian markets. However the area was primarily rural prior to the 80 s and effluents from the area were and are directed to a relatively small treatment plant at Eagleby, just south of Beenleigh. Original Building approval for the brewery was subject to restrictions on flow rates for incoming water and outgoing waste. Brewery output increased from the original 25,000,000 litres/annum to about 73,000,000 just prior to the arrival of Foster s. As the brewery output increased so did the strain on existing Council infrastructure. With the availability of the Yatala site, Foster s was able to close their existing brewery in Fortitude Valley, where the site was plagued by all the difficulties related to a major production facility in the heart of a trendy city residential area, and transfer the production to the new site. Projected output was nearly twice that of the previous year and a major expansion was undertaken, including doubling brewhouse capacity, process upgrades and a new packaging line. To obtain Building Approval for this expansion Foster s was required by the Council to either: 1) wait 5 or 10 years for an infrastructure upgrade, or 2) install an effluent pre-treatment system to reduce the load on the Eagleby Plant to an acceptable level.

3 Services The services required by breweries to produce and package their products are: Electricity Power for electric motors, lighting etc. The principal loads are related to supply of refrigeration, compressed air, moving liquids and packages, and preparation of grain and other brewing materials. Fossil fuel Most often natural gas, coal or fuel oil. This is primarily used for steam generation for process heating. CO 2 Usually collected from the fermentation process, but may also need to be supplemented from external supplies. Another significant electrical load is the liquefaction of CO 2 for storage. Water Beer is primarily water and this can be sourced from the local reticulation system or from local surface or underground supplies. Variations in the composition of brewing water can adversely affect the production of consistent product. Waste Liquid and solid wastes must be removed from site and disposed of in an environmentally acceptable fashion. Significantly greater emphasis is being placed on this aspect as the social awareness of communities matures. Acceptable world practice for the usage of these services is detailed in the following table. Service Stream Good Practice per hl Current Yatala Cost ($A) Electricity (kwh) 8-12 $0.067/kWh Fossil Fuel (MJ) $11.14/GJ Water (hl) 4-10 $1.40/kl Waste Water (hl) less than water $3.00/kl ratio * Breweries of Europe guidance note on BAT Oct 2002 Costs for theses services are shown for the Yatala site. These costs vary with location but will always represent a significant unavoidable overhead and are all destined to grow in the future. Waste Many of the papers at this forum relate to sustainability and reduction of environmental impacts. Terms like sustainable production, cleaner production and eco-efficiency are frequently used. Put simply, what all of these concepts try to achieve is to ensure that the benefit provided by a product is worth the cost to the community of providing it, be that cost financial, social or environmental. As this ratio of benefit to cost becomes larger so we come closer to a sustainable production situation. The less we waste of any of the inputs required to make our product the greater the benefit ratio. The first place to look for sustainability is in the materials that are discarded from our production sites. It is most fortunate for business that we can look in this area for financial as well as community benefits.

4 Effluent pre treatment at Yatala In order to obtain Building Approval for the 1993 upgrade at Yatala, Foster s committed to treat any waste water from the site to a level approximating that of domestic sewage. i.e. a BOD (Biological Oxygen Demand) of about 240 and suspended solids of less than 220 mg/l. To achieve this an anaerobic digestion plant or UASB (Upflow Anaerobic Sludge Blanket) was built in the South West corner of the site, at a cost of over $4,000,000. Following some initial disasters and a very steep learning curve related to its operation the plant is now producing an effluent stream well below the target concentration. It is worth noting that few breweries would have undertaken a project of this nature unless forced to, waste treatment is a long way from core business. It is also worth noting that having been forced into the possession of its own waste treatment facility, the brewery found itself in a position of having to improve other performance parameters that would otherwise receive a much lower priority. The UASB Plant installed in 1993 had a maximum flow capacity of 100,000 litres/hr and a design capacity of 10.3 tonnes COD removal/day (COD = Chemical Oxygen Demand ~ 1.6 times BOD). During its first years of operation the UASB Plant was running at about 75% of its hydraulic capacity. Over the next decade, however, the production capacity of the brewery was increased till in 2003 output reached 230,000,000 litres of beer. As waste water produced is related directly to the quantity of water brought into and used in the plant, failure to undertake water conservation projects would have resulted in the need to double the size of the UASB Plant to process the additional flow. Concentration on this aspect of production resulted in water/beer ratios dropping from about 6:1 to 3.5:1 while production increased from 140 million litres to 230 million litres per annum. A bonus from the anaerobic treatment process was a methane rich bio-gas which is reticulated to the boilers and burned as a supplementary fuel. This will be discussed further under fossil fuel. Water Water is the principal ingredient in beer and water of a quality suitable to be used in making beer is becoming an increasingly scarce resource. Water is becoming significantly more expensive and users who misuse or waste water are becoming exposed to public scrutiny and condemnation. It is fortunate therefore that technology exists to minimise and optimise the quantity of water used for various processes and to recover and reuse that water over and over again.

5 In another major production upgrade was undertaken at Yatala. Once again production was to be effectively doubled and the opportunity arose to make significant further inroads into water and trade waste minimisation. Faced with the prospect of doubling our water demand from the Gold Coast City supply (a region in the grip of drought, similar to the bulk of the eastern seaboard) and also doubling our trade waste flow, studies were undertaken to investigate better ways to operate our plant. A pilot plant was installed to test the feasibility of further purifying the discharge stream from our effluent treatment plant and producing a supply that would compare with town water. Gold Coast Water has been extremely co-operative and helpful with issues related to water supply and trade waste. Foster s elected to proceed with the selected process as part of the upgrade with the target of recovering between 1 and 2 million litres of water per day depending on plant operation. The installation of the Water Management Plant has allowed us to double the capacity of the brewery while only using about 15% more water and actually discarding less effluent at higher quality. The existing anaerobic system (UASB) originally constructed by Aquatec Maxcon in 1993 was doubled in capacity, once again using Aquatec, to allow treatment of a maximum of nearly 5,000,000 litres per day. Normal operational flows are about 75% of this. COD reduction through this plant is of the order of 95% and additional biogas production was worth approximately $400,000 per annum, still about 20% of factory gas requirements. The Environment Group tender was selected to provide the additional treatment systems. Final water quality is superior in most respects to the town water supply. A typical analysis is zero organics and TDS (Total Dissolved Solids) of less than 100. The first step in the treatment is an aerobic stage, required to remove residual biodegradable organics from the stream as these foul the membrane systems downstream. The Moving Bed Bio-Reactor (MBBR) was chosen as a process due to its relatively small footprint and the minimal sludge production compared to say an activated sludge system. BOD from the MBBR is typically well below 10 ppm, the target level. The aerobic digester produces some solid wastes and these are removed by a dissolved air flotation filter. The sand bed in the filter is to ensure all poly electrolytes are removed. Wastes from the backwash and de-sludging processes are collected and returned to the UASB process for re-treatment. A PALL micro filtration system was installed to pre-filter the water before final treatment by an OSMOFLO reverse osmosis system. Once again water from the micro-filter backwash is returned to the front end of the system to recover the water. The reverse osmosis treatment is required to remove the dissolved salts in the waste that would otherwise increase dramatically as the water is continuously recycled. Total recovery is better than 65% of the waste stream.

6 Recovered water is used in boiler feedwater, cooling towers irrigation, washdown and various cleaning processes. As the water is of higher quality than incoming town water this results in a reduction in use of treatment chemicals and dissolved salts in the service water system. The brewery Water Management Plant forms part of an overall strategy to minimise the environmental impact from the site. Water treatment for the brewing process has also been converted to a reverse osmosis system to replace the existing ion exchange trains and all internal processes have been reviewed with the aim of reducing our mass load of TDS/hL beer to 50% of that previous to the expansion. This has reduced the impact of salts in the concentrated waste stream discharged to the council sewer and has also resulted in significant reductions in the cost of chemicals. In addition every kilolitre of water recovered represents a saving of approx $4.40, the total cost of water in and waste water out. For the three years of operation the water recovered has averaged more than 1,500,000 litres per day. Our water consumption, we believe is world s best practice averaging 2.3 litres of water per litre of beer produced for the 2007 financial year. Ongoing water reduction programs have allowed us to reach 2.17 hl/hl during the last six months of the year. Fossil Fuel The Yatala Brewery has three natural gas fired boilers. Steam is reticulated throughout the plant at a nominal 1050 kpa but usually around 900 kpa, Steam is used as a convenient way of reticulating heat energy and is excellent for controlled temperature heating because of the natural temperature pressure relationship. Yatala has traditionally managed steam supply and usage effectively by the time honoured methods of leak control and regular trap maintenance etc. In addition we have utilised heat energy recovery in pasteurisers and heating processes wherever practical. Working on the value in waste materials however we have been able to utilise the methane generated in the anaerobic waste treatment to significantly reduce our dependence on imported fossil fuel. Methane gas is captured in a 60 cubic metre constant pressure bag and pumped to the boiler house by a Rootes type blower at a pressure of 70kPa, where it is mixed with natural gas before burning in the boilers. The energy available is of the order of 50,000 GJ per year and supplies about 20% of our boiler fuel. Also in the major upgrade of the plant in 2004 existing brew house equipment was completely replaced by a twin 850hl plant supplied by Briggs of Burton. One of the features of this plant was the kettle vapour condensation system that enabled the waste heat to be recovered for re-use in the brew house and brewery. Another significant contribution to steam reduction and hence fossil fuel use is the fact that the equilibrium temperature for our service water system is about 32 degrees.

7 CO 2 CO 2 is generated in the fermentation process and is used throughout the brewery for oxygen exclusion and carbonation of product. Surprisingly it did not become cost efficient to capture and utilise site generated CO 2 for process until 1998, as cheap imported gas was available as a by-product from the local fertiliser industry. A CO 2 collection and liquefaction system was installed when brewery production levels allowed internal financial hurdle rates to be achieved. Electricity A negative impact from CO 2 recovery and the waste recycling effort arises due to the electrical energy required to power the processes. Aerobic treatment and reverse osmosis are high consumers of electrical energy. Despite this Yatala has been able to significantly reduce its consumption of energy overall. This has been achieved by attention to monitoring and control systems allowing optimisation of all major uses of power. Through the use of variable speed drives and careful selection and sizing of pumps to match output the wasting of energy has been minimised. A particularly successful project for optimisation of energy usage was undertaken in 2001 with the refrigeration system. The 300 tonne Mycom screw compressors formed the major electrical load in the plant and like most such systems were sized to cope with peak loads. These peaks are extreme events and comprised less than 10% of the normal operating spectrum. The co-efficient of performance (COP) of the refrigeration system drops dramatically as load diminishes. A project team was set up to investigate all aspects of the refrigeration system. Variable speed drives were installed on the ammonia compressors and condenser fans humidity detection and subsequent control of head pressure and the system was split to provide separate brine and chilled water supply. The final results included a drop in energy usage of 1 kwh/hl about 10%, a more consistent brine temperature, greater availability of chilled water and the availability of diagnostic and reporting functions that have increased the reliability of the system. In addition we have been able to temporarily reduce load at times of peak power importation to minimise the demand component of electricity charging. Benefits Social Benefits: The major benefits at Yatala have been achieved through the onsite purification and re-cycling of our trade waste stream for non-product related use. The untreated waste stream from Yatala, if discharged to the council sewer would represent the equivalent of the domestic waste of approximately 250,000 people. It has been estimated that it requires 50kWh 2 of electricity to aerobically treat the waste of one person for a year. Therefore by anaerobically treating the waste on site we are saving the general community from having to build a 250,000 EP Waste Treatment Plant, and providing 1,250GWh of electricity every year to power it.

8 Environmental Benefits : The 2004 expansion of the brewery coincided with the closure of Foster s Kent Brewery in Sydney. The bulk of Kent Brewery s production was transferred to the Yatala site. As a result. a reduction in greenhouse gas production over the last 10 years of between 40 and 50% has been achieved (the methodology of GHG calculation has changed several times in this period). Fossil fuel consumption has been reduced by over 50%. A reduction in demand on fresh water supplies of over 50% and beneficial uses for the solid wastes generated during the treatment process have been achieved. All these are significant steps towards the goal of an environmentally sustainable operation. Cost benefits: While Foster s acknowledges its environmental responsibilities and has taken major steps to improve performance in this area it should be remembered that almost all the environmentally significant projects at Yatala have been undertaken for pragmatic business reasons, and have delivered significant economic outcomes. Costs for services vary greatly from jurisdiction to jurisdiction and also from year to year. Governments are using cost pressures to force change on business so none of these services are likely to decrease in cost in the future and, indeed can be expected to rise dramatically. Comparison 1997 to 2007 The following table shows a comparison of service usages between 1997 and It can be seen that major reductions have been achieved in all parameters. It also shows the economic consequence if we still consumed resources at the same rate as in 1997 at Yatala and if we discharged direct to the council sewer instead of treating our trade waste on site. Figures are for a nominal 4.3 million hl/year. Service Usage/hL 1997 Usage/hL 2007 Service Saving Cost Saving Electricity (kwh) ,300 mwh $290,000 Natural Gas (MJ) ,590 GJ $1,500,000 Import CO 2 (kg) Tonne $2,000,000 Water (hl) Ml $1,260,000 T/ Waste (hl) Ml $2,320,000 COD (ppm) ,000 kg $220,000 SS (ppm) ,000 kg $15,000 TOTAL SAVING $7,600,000 An additional major cost benefit arises from the utilisation of less local government infrastructure. Councils are entitled to recover the cost of infrastructure provision by way of headworks charges imposed on business during the development application phase. Headworks charges in the Gold Coast region at present would require a lump sum payment of approximately $12,000,000 for the additional water and trade waste that would have been generated had the recycling project not gone ahead. Conclusion In this paper I have not attempted to provide an in depth analysis of either processes or economics, but rather to give an indication that the goal of an environmentally sustainable

9 operation does not necessarily come at massive cost. Indeed our experience at Yatala has been that environmental benefit walks hand in hand with economic benefits. We have been able to achieve greenhouse gas emission reductions well in excess of those required by the Kyoto protocol without ever specifically targeting these reductions. We have reduced our requirement for water to a level we believe is best in the world while at the same time ensuring our continuity of business in a drought prone area. Despite the additional electrical demand needed for our water purification and CO 2 plants we have been able to significantly reduce our demand for electrical power. We have been able to recover the energy available in our trade waste stream and utilise it in our boilers thereby reducing our demand on fossil fuel. Whilst achieving these outcomes we have maintained our position as the lowest cost producer in the Foster s Group. References 1. Browne. P., Expansion at Yatala - The Brewer and Distiller. Volume 1. Issue 3. March Hartley. K., Making sewage treatment plants energy self sufficient Qld Gov t EPA Publication 3. Peel. R., Ecological Sustainability in the Brewing Industry - Proceedings of the 25 th convention of the Institute of Brewing, (Asia Pacific Section), Perth (1998) 4. Vincent. S,. An expansion to the Fosters Australia Yatala site to create a 5.5 Million hl Brewery. - Proceedings of the 29 th convention of the Institute of Brewing, (Asia Pacific Section), Hobart (2006).