How to build a bakery in a developing nation, part 2
December 25, 2012
by Lucy Sutton
Baking & Snack Contributing Editor Jim Kline is president of The EnSol Group, Erwinna, PA. With active projects in Africa, Ecuador, Vietnam and St. Kitts, The EnSol Group’s international experience is broad. The company also supports an additional project in Malaysia. Mr. Kline offers his advice to bakeries considering expanding internationally.
Baking & Snack: What type of support should bakers and equipment suppliers get in streamlining the installation and startup process for an overseas bakery build?
Jim Kline: Suppliers and equipment vendors need all hands on deck. Experience and dedicated resources really are needed by both the baker and the equipment supplier when undertaking international projects. An experienced project manager — someone who understands the nuances of the area, who can deal with authorities and trades people, and who is experienced in managing and overseeing international projects — should be on board Day 1. This is key to controlling quality, time and costs on the project.
For the baker, defining the scope of the project will require an understanding of marketplace conditions. Things that may be foreign to a stateside project may be required — laundry for uniforms, power generation with full UPS capacity, dual-fuel ovens, carrying a safety-shoe inventory, 90 to 120 days of ingredient inventory, drivers, meal preparation, on-site housing, enhanced security. Again, this is an area where having the input of an experienced project manager during the planning phase will pay off.
Technical support during commissioning and startup will be essential because local resources will be limited. Put your requirements for support into your requests for quotation. For an equipment supplier, state the requirement up front in your proposal.
How is the equipment selling process different overseas?
Although I’m not a marketer of equipment, I can answer this from a consultant’s perspective.
Ensure your specifications are clear as to what is included and what is not included in your offer. Be clear as to the regulatory standards you are designing to: There are significant differences between North American and European standards. You need to clearly state what the performance standards for the equipment are and provide ranges for dimensions, weight, rate, color and quality that the equipment will produce or handle.
Have payment terms and banking arrangements completed in advance of finalizing the order. Build in a delays clause that states how you will be compensated if the project is delayed beyond an established date.
Be prepared to negotiate far more than we are accustomed to in North America. Bidding may be used to narrow the list of suppliers; however, expect negotiating and haggling to reach the final price. If you’re not comfortable negotiating, then you need to get someone to represent you who is.
When supplying a bakery overseas, what logistical difficulties might equipment suppliers encounter that could delay delivery or add unexpected costs?
I touched on this a bit before, but let me expand on this. You need to align yourself with a firm experienced in the type of shipping you will be doing. And here again, be prepared to negotiate what services they are to provide. The right firm can save you time and money, and track your shipments in real time. There are quite a few firms to choose from, so do your homework wisely. They will quickly become a needed partner in your overseas business.
Finally, if you could give suppliers just one piece of advice, what would it be?
There are excellent opportunities overseas for those that have a streak of daring, but expect the buyer’s needs to be a bit different in emerging markets. Simple designs, less bells and whistles, robustness and reliability, and lower cost are all attributes required to serve this market. If possible, align yourself with a local firm or service provider. It demonstrates a commitment and provides confidence that the products will be properly supported.
This story is sponsored by POWER Engineers, which has one of the most comprehensive teams of engineers and specialists serving the baking and snack industry. As an extension of its clients' engineering teams, the company provides program management, integrated solutions and full facility design for the baking and snack industry. Learn more at www.powereng.com/food.