100,000 tonnes of malt with one man

By Paul Meade

IMAGINE a malt facility, taking in malting barley and out-loading the finished malt on a daily basis and not a shovel in sight.

This is all possible with computers, good engineering design and Stg£30m. And it is a reality on one site at Pauls Malt in the UK which was acquired by Greencore last year.

At Bury St Edmund, in England, Pauls invested Stg£30m to build a malting plant that can operate 24 hours per day, all year round. It is controlled by one operative during the day and operates un-manned during the night.

It took three years to plan and build the plant. It incorporated unique concepts of transporting dusty barley around a plant.

Pauls merely add water at an earlier stage than conventional malting operations. The water converts the barley to a slurry and permits the transport without dust.

In the current very difficult malt markets, Greencore's malt division has generated profits which represents a solid achievement especially given the influence of sterling on Pauls profitability and low prices.

Any recovery in malt prices will transform the performance of this division for Greencore.

Industry estimates put the cost of Sterling on the Pauls performance at over Stg£3m on the profit line. The company has halved its staff numbers and reckon that further reductions are possible. Total annual savings at Pauls are put at Stg£5m to date.

The company has a target of producing 4,000 tonnes plus of finished malt per employee which is well ahead of many competitors.

One of the cost saving areas open to the modern Bury St Edmund site is energy savings resulting from the deregulation of the UK's energy market. Pauls is a large user of electricity and can purchase it's energy needs at different prices for every half hour of consumption.

The acquisition of Pauls makes Greencore the sixth largest malsters in the world. Greencore has increased the size of this division seven fold over the last five years. The company produces 700,000 tonnes of malt from 850,000 tonnes of malting barley.

The group has locations in Ireland, UK and Belgium with the focus firmly on cost reductions, efficiency and keen transport rates.

With Greencore's cash generation, the group is well placed to target further acquisitions in new geographically regions. The best predictions suggest a likely acquisition in Canada with Australia as the second option.

Greencore sees the current environment as good for acquisitions as inefficient players are under pressure due to the low prices.

On the brewing side the company has a 72% market share in Ireland and 27% in the UK. The company is very well established in supplying the Scottish distilling sector.