Wilkin and Sons Ltd., Tiptree Proposed Redevelopment Feasibility Study. rev 1.0
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2 Feasibility study Contents Introduction Process report Buildings report conclusion
3 Introduction Chalcroft and Arctica have been invited by Wilkin & Sons Ltd. to carry out a short feasibility study of their existing business in Tiptree. This has been done in two parts, process and buildings. It should be noted that much of the information on which the process analysis is based has been provided by Wilkin & Sons Ltd. following a single day visit to the Tiptree site. Considerable further detailed study would be required to provide a deeper and more scientific basis to this element of the report. In terms of the buildings report only one option has been considered and this solution was suggested by Wilkin and Sons Ltd. The aim of this study is to highlight the issues currently affecting the existing premises and process and aid the Board of Wilkin & Sons Ltd. when considering strategies for the future development of the business. This report seeks to summarise the key facts and future options.
4 Process Report Chalcroft and Arctica visited site on 1 October A series of meetings with Walter Scott, Chris Newenham, Mark Smith and Melanie Humphries took place during the day to help establish the existing business stratagems and ascertain key facts about the existing process and business. A guided inspection of the process was undertaken with Walter Scott, together with a tour of the outside of the factory with Mark Smith. Current Business Analysis Wilkin & Sons Ltd. have occupied the current site in Tiptree since 1885 with significant investment in 1889, 1895, 1910 (building upgrade), 1958, 1964, , 1981 etc. In general, excluding the war years, every decade has seen investment; an indication of their commitment to growth. The current turnover is around 16M and is producing a satisfactory profit. Turnover has increased by 30% in the last 5 years. This turnover is represented by: - Jams 60% (~100 SKUs); Marmalades 30% (~20 SKUs); Niche products 10% (~100 SKUs). The number of manufacturing employees is around 160 with 15% agency and a low turnover rate. Labour cost of sales is around 18% (typical for a batch operation). The main outlets are Food Service, delicatessen/ speciality shops, export and Waitrose. A dessert business has been purchased recently.
5 Process Report Cont. Current Business Analysis - Cont.: - Thursday Cottage, a small jam business has also been purchased recently. The jam and marmalade market is reported to be shrinking but Wilkin & Sons Ltd. have steadily increased their market share with volume growth of just under 8% in recent years; driven mainly by the growth in mini jars. Future Opportunities: - Extend niche markets (Harrods + 1M) Consider a Premium Brand (home grown, home made, highest quality) Supply to supermarkets (M&S + 10M) Move into Domestic Own Brands (DOB). Diversify process e.g. sauces, yoghurts. Diversify recipes. Bring Individually Quick Frozen (IQF) in house for better supply and processing control though may be a risk to quality. Organic products. Acquisition of smaller producers (23 small jam suppliers in East Anglia alone)
6 Process Report Cont. Future Challenges: - Food technical and hygiene standards are inexorably rising in the food industry driven by supermarket competition. The condition of the present building fabric will be a bar to enjoying most of the opportunities above; particularly in the DOB category. There is virtually no fire segregation or protection in the factory and, given the high presence of combustible materials, fire must be considered a major risk. The electrical installation standards are in part not suitable for use in wet areas and consequently could contravene health and safety legislation. The factory layout does not encourage efficient working, which will put pressure on margins in a competitive market place. The movement of materials within the factory by hand and forklift trucks is considerably more than is desired adding to cost. Segregation of people and forklift trucks does not meet current safety guidelines and the company is at risk of prosecution in the event of a notifiable accident. Lack of segregation and control of work in progress and finished stock may mean unnecessarily high working capital demand. Possibility of take over by bigger producer, depending on the share structure and rules of selling. Reactive approach to New Product Development (NPD) allows Customers to take the upper hand and lead the business.
7 Process Report Cont. Key Decisions Affecting Strategy: - The role of IQF vis à vis the provenance of farm to factory? Growth target? Domestic Own Brand entry yes or no? How would this effect the current control Wilkin and Sons Ltd. have of the business? The importance of manufacturing environment as a competitive advantage; helps brand image and threatens competitors. Conversely does moving the equipment into a modern environment pose a risk to quality and image? Is the sale of land for housing development to fund investment appropriate? Doing nothing may be a high risk strategy are the market dynamics understood? What is the vision and strategy of the competition? How creative do Wilkin & Sons Ltd. want to be in terms of developing current products and finding new opportunities?
8 Buildings report Existing Site and Factory Buildings: - On the following pages can be found a site plan for the current factory, together with a drawing provided by Wilkin and Sons Ltd. with approximate building dates and a very simple product flow added. These give a good indication of the existing site and factory arrangements. The existing factory occupies a footprint of approximately 12,500m2 for the main buildings, but excluding the house, bungalow, farm offices, flats, shop museum and unconnected stores / sheds. The main part of the factory was built in the early 1900 s and follows a low rise, north light solution formed from brick / timber clad walls with wooden trusses and internally visible timber sarking panels typical of the period. In many areas the roof finish is asbestos cement. The stores were built in the 1940 s and the packing room in the 1960 s and are largely similar although metal framed. The most recent factory extension is the filling room built in It is steel framed with a brick / metal cladding external envelope.
9 Buildings report cont. Current Factory Conditions: - In 1913 a Government Factory Inspector described operations at the Tiptree site as being carried on under the best conditions I have ever seen. In the 94 years that have elapsed since then standards in the food manufacturing industry have changed enormously. Whilst great efforts have been made by Wilkin and Sons Ltd. over this period to maintain their own standards and those of the fabric, the internal factory conditions are now showing their age for the following reasons: - Large areas of exposed timber and asbestos cement sheeting in production areas, although encapsulated by painted finishes. Very few hygienic floor finishes, with a lot of painted concrete. Where finishes are present, in the old boiling room for instance, there are instances of failure adjacent drainage channels (although some of these are currently being attended to). High reliance on painted finishes with only the Thursday Cottage area finished in a food safe material. Open drains in some areas. Large number of ledges to trap dirt etc., particularly due to the presence of exposed roof trusses. Exposed services. No air-locks to external entrances. No inherent fire resistance, or fire compartments. Scale of buildings restricts open spaces and dictates product flows.
10 Buildings report cont. New Factory Proposal: - Chalcroft and Arctica were asked by Wilkin and Sons Ltd. in early August 2007 to consider one scenario for the possible relocation of the existing factory onto the adjacent orchard to the east of the existing factory. The main driver behind this proposal is the desire by Wilkin and Sons Ltd. to bring the existing IQF operations in-house on the Tiptree site. The associated freezer provision and extended fruit packing operation have been combined to form a first phase that forms the front end of a new factory. The drawings on the following pages illustrate conceptually how this could be achieved. In terms of overall footprint the new factory is approximately 9,000m2, some 30% smaller than the existing factory. 2,400m2 of new offices and staff facilities space is shown adjacent but linked. Plant facilities are also shown separately to provide possible future factory expansion area, ease of maintenance access and fire separation. The location on the adjacent orchard was suggested by Wilkin and Sons Ltd. This simplifies the relocation process and frees up the existing factory area of the site for redevelopment or disposal.
11 Buildings report cont. New Factory Proposal Benefits: - The proposal shown on the previous two pages is a very quick response to the brief provided by Wilkin and Sons ltd. but it does serve to clearly illustrate one of the key benefits in having a purpose built factory; the building fits the process, not the other way around. A lot more work is required to develop the brief for a new factory and determine the actual size and layout of the spaces. However, other key benefits over the existing factory buildings would be: - Modern, hygienic internal food processing style environment for production areas constructed from fire resisting, food safe finished, insulating composite metal wall panels. No exposed ledges etc. so that internal production environments can be easily and thoroughly cleaned down. Services completely removed from production environments. Dedicated service drops provided directly to equipment within hygienic conduits, such as stainless steel. Higher ceilings where necessary, such as for warehousing spaces, to maximise storage capacities but minimise building footprint. Integral fire resistance provided by use of fire resisting materials. Physical separation of offices and staff facilities and high risk plant areas.
12 conclusions Points for Consideration - Process: - Wilkin & Sons Ltd. have a long tradition of commitment to quality and their workforce. The key to quality lies in the relationship between raw materials, process and people; change one without regard to the others and quality is put at risk. Wilkin & Sons Ltd. have in the past taken bold investment decisions which have allowed the company to flourish. Is the time right now for the next bold decision? Arthur Charles Wilkin wrote in 1905 Where there is no vision the people perish and though he was referring to the development of transport links the quotation holds good today. A clear vision of where the business intends to be in 5yrs and 10yrs time is the foundation of any strategy for change. There may be more than one strategy that results in the end objective and these should be evaluated. Working hours are currently only 8am to 5pm, 5 days a week, so significant additional capacity is available.
13 Conclusions cont. Points for Consideration - Buildings: - The existing factory buildings have a unique character. Is this vitally important to the business and needs to be retained or is a fresh start with a modern design required? How would any development need to be phased? Could it be done in one go or are a number of smaller phases required to complete the vision? What size of facility is required? How is expansion of business volumes to be dealt with? Is a strategy for future extension required or will space be provided initially that can be quickly absorbed by new equipment as required? Or is a combination of the two the best way forward? Does the design of the building just meet current standards, or is a cutting edge approach required? What impact should green issues have on the building design? Should this issue affect only the building services or is a more radical approach, such as the new Adnams distribution centre required? Is the existing factory site to be simply disposed of or should Wilkin and Sons Ltd. take a more active role in defining life within Tiptree by developing it themselves, in conjunction with a partner or by agreeing a clear design brief for the site, such as low cost housing only for instance?
14 Conclusions cont. Next Steps - Process: - Understand the Board s vision for the business. Develop a marketing strategy for that vision. Develop a manufacturing strategy to meet the marketing requirements. Develop a project strategy to deliver the manufacturing requirements. There is sufficient capacity to support moderated growth. A step change in output, to take on M&S business, will require process and packing additions. An efficient process layout should return 10% savings on cost of manufacture. A continuous improvement scrutiny should return 5% savings depending on the internal rate of return. Invest to reduce base operating costs. Develop an NPD facility to establish a culture of innovation, provide a tool to grow excellent customer relations and in time provide category management of the sector for customers.
15 Conclusions cont. Next Steps - Buildings: - A detailed brief is required to accurately define the requirements of Wilkin and Sons Ltd. This needs to cover all aspects of the project, both in terms of the process and manufacturing requirements, but also the specific building requirements. Only one solution has been considered. More work is required to fully consider what other options are possible and their inherent strengths and weaknesses. The work on the buildings options needs to be coordinated with the work being carried out for Wilkin and Sons Ltd. by others who are considering the land values of the existing site. Early consultation is required with the local planning department to establish what is and what is not likely to be considered as acceptable development. A review of the existing site services is required and some preliminary work carried out to establish what is required, what sort of budget is required and the potential programme requirements. An outline project budget is required to consider with some degree of accuracy what the total spend commitment for the project is.
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